President-elect Donald Trump’s promised federal budget cuts have created an uncertain future for Medicaid funding.
“There really aren't that many discretionary areas that can be cut effectively,” said Dr. Jack Lewin, the administrator of the Hawaiʻi Health Planning & Development Agency.
He’s been considering what the potential $2 trillion cuts in federal funding would look like under Trump.
“Medicare and Social Security could be cut, but there have been promises by both parties not to touch Medicare or Social Security,” he said. “But then that leaves the most vulnerable spending that approaches a military size budget, which is Medicaid.”
While Medicare and Social Security have age restrictions, Medicaid is open to people of all ages with limited incomes.
Medicaid usage in Hawaiʻi
Half of Hawaiʻi’s children and roughly a third of residents rely on Medicaid for health coverage. About a third of births in the state are covered by Medicaid.
These numbers can fluctuate based on how many people qualify for the program. For example, during the COVID-19 pandemic, the number of those enrolled in Medicaid in Hawaiʻi was higher than today.
Lewin explained that cuts to the program would create devastating impacts for those who rely on the service.
“They would be unable to come up with the funding likely to take care of their diabetes or their heart disease or other serious problems that they have,” he said. “We would see some significant crises in terms of preventable morbidity and mortality across a population of people.”
Generally, Hawaiʻi’s Medicaid program operates on about a 60-40 match. That means for every dollar spent through Medicaid, Hawaiʻi contributes 40 cents and federal funding contributes 60 cents.
The state's total Medicaid spending — including the federal match — is about $3 billion.
Possible changes to Medicaid
The Trump administration could change the Medicaid program by reducing the federal match formula, changing eligibility — like implementing work requirements and lockout enrollees for unpaid premiums — or instead giving states block grants.
A block grant system means that the federal government would give states a portion of funds instead of matching spending. States would then have to decide all of the other specifics, such as eligibility.
Some of the changes would need congressional approval. Although Republicans have a majority in the House and Senate, many red states such as Louisiana and Kentucky have the highest percentage of people on Medicaid.
Hawaiʻi's U.S. Rep. Ed Case explained that reductions to Medicaid would impact residents from Palau, the Marshall Islands and the Federated States of Micronesia — which are part of the Compacts of Free Association, or COFA.
These three Pacific nations share treaties with the U.S. that allow residents to migrate to the country visa-free in exchange for using their land for military positioning.
“We just in the last couple of years succeeded in Congress in getting full access to Medicaid as part of the renegotiation of our treaties with those countries,” he said.
“Many, many parts of that community are very marginalized and in great need. Their health care is pretty critical and access to Medicaid has been a lifesaver for those communities. And so any reduction in Medicaid is going to hurt them in particular.”
Future of health care in Hawaiʻi
Lewin of the Hawaiʻi Health Planning & Development Agency warned that because the federal match is so large in Hawaiʻi, it will be nearly impossible to make up with state dollars. In the meantime, Hawaiʻi needs to prepare if the cuts materialize, he said.
The state Department of Human Services distributes Medicaid through a program called Med-QUEST. Program administrator Judy Mohr Peterson explained that it’s too soon to try to anticipate what the cuts would be.
“Right now we have a lot to focus on just providing the services that we are providing.”
She advised those who use the Med-QUEST program — as she always does — to keep up with doctor and dentist appointments.
“We are encouraging, as we always encourage, people to take care of themselves, to get their well-child visits. If they have kids, we even have a child wellness incentive program that encourages parents to take their kids in,” she said.
“If folks receive information from us saying, ‘Hey, it's time for you to renew your coverage or we need this additional information from you’, then please do respond back.”
Lewin explained that Hawaiʻi has been innovative in the past and will need to continue to rethink how it finances health care.
“We may need to be equally creative in the coming decade to think about how we're going to continue with that tradition in the face of a changed view of what the federal government is going to finance,” he said.
