After Medicaid Dance This Summer, Heller Backs New Bill That Would Gut Medicaid

This spring and summer, when Republicans pushed forward various Obamacare repeal bills that would deeply cut Medicaid spending, Sen. Dean Heller (R-NV) came out swinging, vowing not to support any bill that would go after either traditional Medicaid or the Medicaid expansion that has extended coverage to hundreds of thousands of low-income people in his state.

But Heller—arguably the most vulnerable Senate Republican up for reelection next year—has now jumped on board a new bill that would deeply cut both over time.

In addition to scrapping Obamacare’s employer and individual mandates and the medical device tax, the plan—dubbed by its authors as the “last chance” to repeal Obamacare—would convert federal funding for Medicaid and the health care exchanges into block grants that states could spend however they choose, with essentially no limits.

The block grant would increase by 2 percent annually, far below the medical inflation rate of 3.8 percent, meaning funding would be cut more deeply every year. States that expanded Medicaid would experience even deeper reductions as the bill would shift money to achieve “parity” with non-expansion states.

And like the repeal bill that failed to make it out of the Senate this summer, the new bill would put a per capita cap on all of Medicaid, reducing spending by hundreds of billions of dollars over 10 years and reducing Medicaid enrollment by at least 15 million people, according to the Congressional Budget Office.

Sen. Lindsey Graham (R-SC), the bill’s lead author, touted the bill’s deep cuts to Medicaid, saying that Medicaid spending currently is “unsustainable” and “crowds out the federal budget.”

Still, Heller insisted to TPM on Wednesday that Nevada would see a 30 percent health care spending increase under the bill, and said Nevada could both keep and expand its Medicaid program if it passes.

“To me, it’s like Apple coming out with the iPhoneX,” he said. “If you don’t want to buy it, you can keep your iPhone7. But there is an iPhoneX out there, a bigger and better product. If you like your iPhone7, if you like your old Medicaid program, you can keep it.”

Health care experts dispute this characterization, saying it will be impossible for states to keep their current systems as the funding shrivels up and disappears.

Former Health and Human Services senior counselor Aviva Aron-Dine also explained to TPM that Heller’s claim of a 30 percent funding increase is based on an “extremely misleading” comparison of apples and oranges.

“Here’s what they’re doing: they’re comparing funding levels under their block grant in 2026 to funding levels under the ACA in 2020. That doesn’t tell you about the funding state would receive in 2026 under current law, which is what you should be comparing,” she said. “When you take into account the per capita cap, Nevada loses funding.”

Aron-Dine, now a senior fellow at the think tank Center on Budget and Policy Priorities, co-authored a report released Wednesday that found that Nevada would lose 639 million dollars in federal funding by 2026 under the proposed bill. States like Nevada that expanded Medicaid would feel the pain sooner, the study argues, as Heller’s bill would completely eliminate Obamacare’s 90 percent federal funding for the Medicaid expansion starting in 2020.

Heller’s office pushed back on this characterization, arguing in a statement to TPM that the plan “gives states the flexibility to continue programs that are working as well as explore new options to bring down costs and increase coverage.”

“Under our proposal, expansion states are no longer on the hook for Obamacare’s 10 percent match and states can use 20 percent of their funding to cover traditional Medicaid,” Heller’s communications director Megan Taylor wrote. “This health care proposal is the only plan that fundamentally takes the decision making out of Washington and encourages innovation and the exploration of new ways to improve and deliver care.”

The legislation has not yet been scored by the non-partisan Congressional Budget Office.

Heller also disputed Wednesday that he has flip-flopped on protecting Medicaid since opposing a similar block grant proposal proposal in June, saying: “I’m doing what I said I would do, which is work with the governor of our state.”

But Heller admitted that the governor of his state, Republican Brian Sandoval, has not yet endorsed the bill, and called winning him over a “work in progress.”