Senators Unsure if They Can Save Medicaid Expansion

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By Alex Ruoff

Altering the House’s Obamacare repeal bill to aid Medicaid expansion states may be impossible under Senate rules, lawmakers said May 9.

The Senate’s version of the American Health Care Act (H.R. 1628) must cut the federal deficit to the same extent as the House bill in order to qualify for the budget reconciliation process that allows bills to pass with a simple majority, senators told reporters. This means new money for states that expanded their Medicaid programs under the Affordable Care Act would have to be paid for by new revenue or cuts elsewhere, Sen. Ron Johnson (R-Wis.) told reporters.

Several Republicans senators mentioned a “softer landing” for ending Medicaid expansion funding compared with the House bill, either extending how long the federal government supports expansion states or adding funds for high-risk pools or higher tax credits to support people who lose Medicaid coverage. Either way, the Senate bill must achieve the same savings as the House bill, which looks to cut $880 billion in future Medicaid spending.

“I think we’d like to take the Medicaid provisions and engineer a softer landing that still eventually gets to the same place,” Sen. Roger Wicker (R-Miss.) told reporters.

Sen. Rob Portman (R-Ohio) told reporters he wants to increase tax credits for some of the poorest Americans, to offer additional support for people who might lose Medicaid coverage if the ACA is repealed.

The House bill, passed May 4, would freeze federal Medicaid expansion funds starting in 2020. The legislation would also convert the public health insurance program into a per-capita cap system, which would give states a flat amount per year instead of the current system of matching state spending at a given rate.

Senators May 9 discussed converting Medicaid to a block grant system or capping federal funding based on the number of Medicaid beneficiaries in the states to find additional savings, lawmakers told reporters.

Complicating this issue is the fact that senators don’t know exactly how much deficit reduction would be achieved under the House repeal bill. The version of the AHCA first considered by the House in March was projected to reduce federal deficits by $337 billion over 10 years, according to a Congressional Budget Office analysis.

Questions About Changes

Republican senators are debating how to support the 11 million adults who gained coverage under Medicaid thanks to the ACA. Many are supportive of the House bill’s move to create high-risk insurance pools, which subsidize the cost of insurance for people with expensive medical conditions.

Sen. Susan Collins (R-Maine) gave a presentation to fellow Republican senators on the high-risk pool her state once used, which assigned high-cost beneficiaries on individual plans to a reinsurance pool, funded by a fee on insurers in the state. Plans were reimbursed by the state nearly all the cost of covering people in these pools, offsetting the risk of insuring them and forestalling a need to raise premiums.

Collins said the House bill grossly underfunds these high-risk pools. Such programs would cost about $15 billion per year, she said.

“We would need a great deal more funding for this to work,” Collins said.

The House bill included $23 billion specifically for these kinds of programs and an additional $115 billion in state grants, all spread out over 10 years.

Sen. Cory Gardner (R-Colo.), however, said lawmakers think high-risk pools could help Medicaid expansion states like his.

There has been discussion among senators about changing Medicaid disproportionate share hospital (DSH) allotments, additional money given to hospitals that serve a large Medicaid and uninsured population. The ACA reduced federal support for DSH allotments.

Some lawmakers want to increase DSH allotments to make up for Medicaid cuts, Sen. David Perdue (R-Ga.) said.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

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

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