WUOT’s Carole Myers: The proposed cuts to Medicaid and SNAP have significant implications for Tennesseans and the state budget. The bill has passed in the U.S. House of Representatives, and now is being considered by the Senate. Today, I'm joined by Dr. Matt Harris, a University of Tennessee expert in labor, public, and health economics, to discuss the implications of the Medicaid and snap cuts. Welcome.
Matt Harris: Thank you for having me.
How will the proposed cuts impact Tennesseans and Tennessee families?
Well because SNAP and Medicaid are two very different programs, but both serving vulnerable populations, let's kind of take those separately. About 12% of households in Tennessee are on SNAP, the Supplemental Nutrition Assistance Program, or what was called Food Stamps. What's really important about this program, though, is that while it's 12% of households, over 20% of children in Tennessee receive that. The cuts that they're talking about to this are in the $300 to $500 million range per year, which is about 30% of the total amount the Tennesseans are currently receiving in food assistance. What this is going to mean at a top level is that anybody who's receiving benefits may be cut completely, or they may receive, you know, as much as a 30% reduction, if it's spread uniformly, but for low income and food insecure households, that's going to hurt.
So let's talk about Medicaid cuts then.
TennCare is Tennessee's Medicaid program. It covers half of all the children in the state. It also covers a number of senior citizens who are low income and asset constrained, and we're projected to lose between $500 to $800 million per year. So if people are cut from that, we're looking at probably about, you know, 6% to 8% cuts. The real question is, how is the state going to respond? And in a case like this, we're a low tax state that we don't have political will to raise new revenues, so you got to believe it's going to be increased cuts, whether that's decreased enrollments, whether that's an expectation of increased cross subsidy from group insurance like Blue Cross Blue Shield, Aetna, Humana, et cetera. It's going to put a financial strain on rural hospitals and hospitals that serve low income populations as well. But that's a non-trivial cut. That's a serious cut, and we're not sure yet how that's going to play out and get reallocated.
Some of the justification for the cuts is to address waste, fraud, and abuse, and it relies very heavily on imposing Medicaid work requirements.
Work requirements are, as good as they sound philosophically, they're really wasteful and dominant reality. What we've seen, and this was from the Tennessee General Assembly, is that when they proposed work requirements, when you propose legislation in the General Assembly, you have to include what's called a fiscal note, which talks about how this will affect the budget. And by the Tennessee General Assembly's calculations, it was going to cost over $7 in case management costs for every dollar that was eliminated in Medicaid expenditures. And that's if you're going to do it right. So you're spending $7 to eliminate $1 in expenditures, while denying vulnerable populations, low income people, and people with severe health conditions, access to medical care.
How will the Tennessee economy be impacted if this bill becomes law?
It's going to have negative implications for the healthcare sector. For sure, anytime that you have less money coming in, then you have less money being spent. You have less money being paid in wages. Hospitals will have less money to hire staff. Every time we talked about the potential for Medicaid expansion under the ACA, we always highlighted the number of jobs that it would create. In this case, this will cost jobs. It will cost employment. It will decrease economic output in our state.
This transcript has been lightly edited for content.
