Likely Senate Plan For Medicaid Would Mean More Pain In The Future

Cuts would start later than House bill envisions, but eventually go deeper.

Senate Republicans apparently have decided the way to improve that “mean” House bill to repeal the Affordable Care Act is to make it even meaner, at least over the long run.

The chamber’s GOP leaders have sent their repeal legislation to the Congressional Budget Office (CBO) for evaluation, with plans to hold a vote on the bill late next week. Although negotiations are ongoing, they have come up with a proposed compromise for one of the most complicated issues, Medicaid funding, according to reporting by Peter Sullivan of The Hill and Caitlin Owens of Axios ― and later confirmed to HuffPost by a health care strategist familiar with the proposal.

The details remain fuzzy, and may be in flux. In normal times, it would make sense wait until confirmation of those details or, better still, a chance to read the bill itself before drawing firm conclusions about what the proposal would do.

But Republicans are doing their best to keep legislative text a secret for as long as possible. On Monday night, as Democrats held a marathon debate to protest GOP tactics, Senate Majority Leader Mitch McConnell (R-Ky.) wouldn’t even promise 10 hours of public deliberation before holding a vote.

So it’s now or never when it comes to thinking through what this provision would do. And this provision would likely mean bigger cuts to Medicaid over time, although they would not hit as quickly as the cuts in the House version of repeal, which Senate Republicans have used as their template. 

Cutting Medicaid Is A Major Goal Of GOP Repeal Efforts

Medicaid has become an issue in this debate because the Affordable Care Act made extra funding available to states that expanded eligibility for their programs, so that anybody in households with income below or just above the federally defined poverty line can qualify. Many millions of people have gotten insurance as a result of that expansion, and initial research suggests that, predictably, they are more financially secure and have better access to health care as a result.

Republicans want to roll back that expansion, as part of their effort to wipe away as much of “Obamacare” as they can. But the GOP effort wouldn’t stop there. Republicans also want to realize their long-held dream of ending Medicaid as an entitlement ― in other words, ending the federal government’s open-ended agreement to fund the program at whatever it takes to cover the people who qualify for it, no matter how much their care costs and no matter how many become eligible.

Instead, Republicans reportedly would give states a choice ― accepting a “block grant” that allots them fixed sums of money each year or moving to a system of “per capita caps” that would allot fixed sums per person, but at a predetermined inflation rate that would likely grow more slowly than the actual cost of care. Either way, the scheme would likely reduce Medicaid funding over the long term.

The appeal of these proposals, to Republicans, is that they would mean smaller government and less federal spending. Not coincidentally, it would also mean an opportunity to cut taxes for the wealthiest echelon of Americans who now pay more in order to finance the Affordable Care Act’s expansions of health insurance.

But both propositions ― rolling back the expansion and cutting Medicaid funds going forward ― would lead to cutbacks in who or what the program covers. And that’s made it controversial even among some Republican lawmakers. It’s a big reason the CBO reported that the House bill deprive more than 20 million people of health insurance.

Among the GOP senators expressing the most concern about their party’s bill are those from states that expanded their Medicaid programs (not all did). These state are particularly dependent on Medicaid money, both to prop up local health care institutions and, in some cases, to provide a critical tool for fighting opioid addiction. These lawmakers include the one political analysts rank as the most vulnerable Republican senator in the 2018 elections ― Dean Heller of Nevada ― as well as Shelley Moore Capito of West Virginia, Lisa Murkowski of Alaska and Rob Portman from Ohio.

It Sounds Like Smaller Cuts At First, Bigger Cuts Later

It appears the GOP leadership has changed the bill in response to those senators, although the ultimate effect would be to introduce cuts more slowly while imposing larger ones over time.

Specifically, the proposal sent to the CBO would phase out the Medicaid expansion more slowly than House bill. And initially, it would allow states to secure larger federal contributions to Medicaid than the House plan.

The combined effects of these changes would delay the impact of the Medicaid cuts, postponing the date at which people actually lose their insurance or services. But the cuts would still take place ― and, more importantly, they would accelerate. The federal contribution to state Medicaid programs would fall more quickly starting in 2025, most likely creating an ever larger gap between what states need to maintain their programs and what the federal government provided. 

It’s impossible to be sure without final text and thorough analysis, the kind that ― thanks to McConnell’s rush ― is unlikely to happen until right before the Senate vote, if it happens at all. But the probable outcome of setting a higher starting point for the spending levels and a lower growth rate would be smaller cuts in the beginning, bigger cuts afterwards, a quick appraisal from the Center on Budget and Policy Priorities said Monday.

We don’t quite know how this would work but ... it’s almost certain that any benefit for states would be more than swamped by the application of the lower [inflation] growth rate starting in 2025,” Edwin Park, the center’s vice president for health policy, told HuffPost. 

Republicans have frequently said that rolling back the Affordable Care Act’s expansion of Medicaid would strengthen the program’s ability to pursue its historic mission of helping poor children, pregnant women, the elderly and the disabled. But the House bill’s long-term cuts to the program would jeopardize coverage for precisely those groups and, were something like this reported Senate proposal to become law, the effects would ultimately be even harsher.

Forcing Republicans to explain how they reconcile that apparent contradiction would be a worthy enterprise, if only there were time to do it.