GOP Bill Could Spell End for Medicaid Expansion, Advocacy Groups Fear

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By Victoria Pelham

The House Republican plan to repeal and replace Obamacare could “effectively end” the landmark health law’s Medicaid expansion, champions for the federal health program for the poor are fretting.

At risk is health-care coverage for around 11 million people in 31 states and the District of Columbia, who were newly insured when the Affordable Care Act permitted states to extend Medicaid to include those making up to 138 percent of the federal poverty level.

The Republican bill would cut off states’ ability to expand programs after December 2019. And though states would be allowed to maintain the safety-net insurance for additional Medicaid beneficiaries already insured under the ACA, the GOP’s American Health Care Act would taper off Medicaid’s enhanced federal match by 2020 for expansion recipients with more than a month’s lapse in coverage.

However, many adult recipients go on and off the rolls, and advocacy groups such as Families USA, Community Catalyst and the Center on Budget and Policy Priorities (CBPP) predict greater financial burden on the states and—more realistically—eventual cuts to the expansion if the proposal becomes law.

Most expansion states would likely see heftier price tags in two to three years, reaching 2.8 to five times more by 2020, according to a CBPP analysis. States would need $253 billion in the next decade to continue the coverage as is under this bill, the group projected. Coupled with proposed per-enrollee ceilings on federal Medicaid funding, states might have to start coughing up $25 billion annually by 2022 to do so.

The latest proposal, which was approved March 9 by two House committees, is one of many from Republicans wanting to make good on campaign promises to scrap the law. The legislation has been endorsed by the Trump administration but come under fire from some conservative lawmakers who think it doesn’t go far enough and from patient advocates.

“Because the bill dramatically increases costs to states for making that choice [to expand], we would expect to see a very significant rollback of coverage in that expansion population,” Dee Mahan, director of Medicaid initiatives at Families USA, said on a conference call about the bill’s Medicaid impact.

Hard Fiscal Choices

States would need to make “hard fiscal choices” that would likely lead to some beneficiaries losing coverage, she added.

Some states like New Mexico, Indiana (which recently filed a waiver request to continue its Healthy Indiana Plan 2.0) and Washington already have laws on the books that would end their expansions in the event of federal Medicaid spending cuts.

Over the long term, the GOP bill “would likely make expansion unsustainable for states, ultimately forcing most or all of the 32 states that took up the ACA’s Medicaid expansion to end it,” according to the CBPP.

This, the CBPP warns, would mean millions of newly uninsured patients in “just a few years ... reversing gains in access to care, treatment for opioids or other substance use disorders, mental and physical health, and financial security,” as well as a rise in uncompensated-care costs for hospitals and states.

Health-care groups such as the American Medical Association are opposing the proposed law.

Timetable

The House Ways and Means and Energy and Commerce committees voted March 9 to approve their respective portions of the bill. The two measures will be combined and sent to the Budget Committee before heading to the floor.

“Today, the House took a decisive step forward in fulfilling a promise to the American people that has been years in the making: repealing and replacing Obamacare with affordable, patient-centered reforms,” Energy and Commerce Chairman Greg Walden (R-Ore.) said in a statement. “After conducting an open and transparent markup, we are proud to put forth a plan that represents a Better Way for patients and families.”

The Energy and Commerce statement asserts the proposal “responsibly unwinds Obamacare’s Medicaid expansion” with a “stable transition.”

Jeff Myers, president and CEO of Medicaid Health Plans of America, said he largely supports the mission behind proposals like the American Health Care Act: to make a $550-billion-and-growing program sustainable.

But the timeline for expansion changes, he believes, is too soon and “puts our state partners at real risk.”

That’s especially true given early state negotiations with health plans, Myers told Bloomberg BNA.

Some conservative Republicans think the phase-out of the Medicaid expansion would take too long. Obamacare opponents, who haven’t all coalesced around any one replacement plan, believe President Barack Obama’s signature health-care law has killed choice and led to skyrocketing deductibles.

In contrast, supporters of the ACA argue it insured 20 million people and ate up uncompensated-care costs.

“One thing we want to be really clear about, though, is this bill and some of provisions of it are not what can pass the Senate,” Michael Miller, strategic policy director at Community Catalyst, said on the Families USA call.

“We’re going to come out of this, assuming some version of this passes or goes through, with a strange hybrid of ACA rules that exist today and a bunch of new rules,” he said. “How that intersects in terms of coverage and affordability will take some work to tease out.”

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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