A new Congressional budget proposal would reduce D.C.’s Medicaid federal reimbursement rate, causing potentially devastating effects for the 24% of D.C. residents that rely on it. It also means that the D.C. budget may have to make severe cuts elsewhere to fill the gap.
Back Up, What’s Happening To Medicaid?
House Republicans passed a budget resolution last week that would cut Medicaid expansion nationwide and drop D.C.'s Medicaid match from 70% down to the federal minimum of 50%. This could result in almost 110,000 D.C. residents being dropped from Medicaid coverage. Medicaid also helps fund hospitals, fire, and special education in public schools. Senate still needs to vote on the resolution.
What Makes DC Special?
Congress and D.C. settled on a 70% match in the ‘90s because D.C. shoulders the Medicaid responsibilities of a state without the ability to raise the same revenues because of legal barriers. Our median income is also particularly high, making our Medicaid costs higher than normal.
Breaking Down The Cost
It’s estimated that this will cost the city budget $800 million per year, but the reality could be much higher. This is particularly hard for D.C. because we have a debt cap and can’t borrow money to cover shortfalls. This means D.C. would need to reduce benefits, scale back eligibility, or look to cut other city programs.
The Bigger Picture
This isn't happening in a vacuum. In addition to laying off thousands of federal workers and cutting grant programs that fund thousands of D.C. jobs, the Trump administration is trying to force agencies to relocate outside the DMV. Both these things, in addition to upending a lot of people's lives, would have large effects on the city budget and unemployment rate — potentially increasing D.C. residents' need for Medicaid.
Local Pushback
Economic development non-profit Federal City Council has started a petition alongside D.C.’s business community, encouraging Congress to keep D.C.’s 70% federal Medicaid match.
