Medicaid Myth #3: Ryan Plan Kicks Folks Off Of Medicaid

This concludes our blog series on the myths of the Ryan Medicaid plan. Wednesday‘s blog showed why Ryan’s plan would preserve rather than gut Medicaid and yesterday‘s post debunked the myth that more Medicaid, in its current form, will help the poor. The third myth is:

The Ryan plan will kick folks off of Medicaid.

Truth: Medicaid enrollment and spending have ballooned, and growth must be slowed to preserve the safety net. Continuing to ignore this behemoth entitlement program, the proverbial 800-pound gorilla in the room, will ensure everyone loses their Medicaid benefits.

Funded by both federal and state tax dollars, Medicaid is now the single largest program in Pennsylvania’s budget, and consumes almost 30 cents of every dollar state government spends.

Today, there are 2.5 jobholders for every Medicaid recipient. A decade ago, the ratio was 3.9 to one and in 1990 it was 5.2 to one. At this rate, there will soon be more Medicaid recipients than those earning a living.

Overall, state Medicaid spending increased more than 50 percent over the past decade. This rate of growth is unsustainable. Without bringing Medicaid spending and enrollment under control, we threaten the solvency of the program and of our commonwealth. We must instead look to transition individuals off of government dependency and provide a sustainable safety net.

Indeed, 29 states including Pennsylvania have asked for greater flexibility in administering Medicaid. Without state flexibility to innovate, change incentives and right-size the program, future generations of taxpayers won’t be able to afford a social safety net.

Don’t be fooled by the scare tactics. The Ryan plan and similar calls for state flexibility will save Medicaid. It’s the opponents of these reforms who will shred the safety net.

To learn about the other myths leveled at the Ryan plan, read our Policy Memo.