Major changes for Medicaid coming under Trump and the GOP

What will happen to Obamacare when Trump takes office?
What will happen to Obamacare when Trump takes office?

Donald Trump likely won't let Medicaid collapse, but he will vastly change the health insurance program for low-income Americans.


Here's how Medicaid works now:

Nearly 73 million Americans are on Medicaid or the related Children's Health Insurance Program (CHIP). The programs cost $532 billion in fiscal 2015, with the federal government shouldering 63% of the bill and states paying 37%.

Most enrollees are low-income children, pregnant women, parents, the disabled and the elderly. Under Obamacare, low-income adults with incomes of up to 138% of the poverty line -- $16,400 for a single person -- were allowed to sign up in states that opted to expand their Medicaid programs. So far, 31 states, plus the District of Columbia, have done so, adding about 15.7 million more people to the rolls since late 2013, just before the provision took effect. (This figure includes both those newly eligible under expansion and those who always met the criteria.)

While Democrats say the program is a vital part of the safety net, Republicans have long criticized it as being bloated, inefficient and rife with fraud. They want to limit the federal government's financial responsibility, while giving states more direct control over whom to enroll and what kind of coverage participants receive.


"You cannot let people die on the street, ok?," he said at a CNN town hall in February. "The problem is that everybody thinks that you people, as Republicans, hate the concept of taking care of people that are really, really sick and are gonna die. We gotta take care of people that can't take care of themselves."

Related: Obamacare under President Trump: What happens next?


Capping federal funding is also popular among Republicans on Capitol Hill. House Speaker Paul Ryan would let states choose whether they want to receive a block grant or what's known as a per-capita allotment, which would provide a fixed sum based on enrollment. He would also slow the annual rate of growth of funding.


"They can come up with different ways to cover the vulnerable in their states," he said.

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Also, the expansion of Medicaid under Obamacare makes issuing block grants more complicated since the program is now so unequal. she said. States that broadened their eligibility receive a lot more federal funding and serve many more residents. Under Ryan's plan, states that haven't expanded would not be allowed to do so, while states that did would gradually lose the enhanced reimbursements they receive under Obamacare to cover the expansion population.

(The federal government has covered 100% of the expansion population's costs for the first three years of the program. That rate will gradually decrease to 90% by 2020. For the core Medicaid program, the federal government matches between 50% and 72% of a state's spending, depending on the state's average income per capita.)

Related: How Trump may cover Americans with pre-existing conditions






Related: Obamacare architect says replacing it won't be easy



"Reforming traditional Medicaid is essential to creating better health outcomes and curbing the dramatic growth in Medicaid spending," Pence said at the time. "HIP 2.0 takes consumer-driven Medicaid reform to the next level by replacing traditional Medicaid for many in Indiana with a plan that empowers participants to take charge of their health and to be cost-conscious consumers."


Editor's Note: This story originally noted that Medicaid cost $509 billion for the fiscal year ending June 30, 2015. It's been updated to reflect the data for federal fiscal year 2015, which ended Sept. 30, 2015.

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