Will The GOP Senate End Medicaid As We Know It?

GOP governors, hospitals, insurers and patient groups begged Republicans not to pass a bill that would gut Medicaid. House Republicans voted last week to do so anyway.

The last round of negotiations that secured the GOP’s Obamacare repeal its narrow passage in the House focused on its protections—or lack thereof—for people with pre-existing conditions. But at the the heart of the bill is its nearly trillion dollar cut in federal funding to Medicaid, a program that has long been in the crosshairs of Republicans. The provisions in the legislation, the American Health Care Act, to phase out the Medicaid expansion and to overhaul the traditional Medicaid program stand to remake the American health care system in a way that will put states in a financial pinch and leave the country’s most vulnerable exposed to a lapse in care.

As an aborted vote for the bill in March was initially being whipped, some Republicans—particularly those from purple or blue Medicaid expansion states—raised concerns about the massive cuts to Medicaid. Most ultimately fell in line and supported a revamped version of the legislation last week, despite the fact that nothing was done to address the Medicaid-related concerns. The proposed cuts come as President Trump himself vowed time and time again on the campaign trail that he wouldn’t touch Medicaid.

His promise would be violated by House GOP bill, as it seeks to freeze Medicaid expansion money for states in 2020 by withhold funding at the enhanced match rate for any new enrollees after that point. Other beneficiaries are at risk with the more long-term transformation that program stands to undergo under the GOP bill. The legislation would overhaul the program—now an unlimited federal match rate—into a per capita cap system, meaning that states would get a fixed amount of funding per enrollee. The Congressional Budget Office, analyzing an initial version of the legislation, predicted out of the 24 million Americans who would lose coverage under the earlier GOP bill compared to current law, 14 million were due to its changes to Medicaid.

Medicaid has a broad reach, beyond offering health insurance for low-income people, that includes support for anti-drug addiction programs and funding for special needs schools. Medicaid covers the care of three-in-five nursing home residents, and one-fifth of Medicare beneficiaries receive support from Medicaid as well. Nearly 70 million people benefit from the program, including 33 million children, according to a 2015 Kaiser Family Foundation report.

Not surprisingly then, a constellation of patient advocacy groups have come out against the GOP bill, pointing specifically to the Medicaid cuts. The American Cancer Society worried about “fewer cancer patients accessing needed health care.” The AARP said the shift to a per capita cap “could endanger the health, safety, and care of millions of individuals.” The American Heart Association slammed Republicans last week for passing a bill that did not address issues the group had with the original legislation “including the shifting of Medicaid costs to states.”

Republicans argue that cutting federal Medicaid funding will force states to become more innovative and efficient in the implementation of their programs. But that ignores the fact that many states already operate very efficient programs, and overall per-enrollee spending for Medicaid is growing at a considerably slower rate than that of private insurance.

Governors, including some Republicans, thus warned that the House GOP bill “does not ensure the resources necessary to ensure no one is left out,” as a letter from four Republican governors put it in March.

Health experts have cautioned that by placing a cap on federal funding—a cap that will place more of the burden on states as time goes on—states will be forced to cut costs by shrinking the benefits offered enrollees, imposing cost-sharing requirements, or squeezing providers on the payment side. Ironically, as some Republicans complain that the current Medicaid program doesn’t offer enough choice, the cuts in their bill will push it further in that direction: towards a system with stingier plans and narrower networks.

Hospitals would see a spike in uncompensated care, and thus, they too have come out aggressively against the cuts, including in a letter from seven different hospital organizations that said they were “deeply concerned” about the bill’s overhaul of Medicaid

Even private insurers have harped about the cuts. America’s Health Insurance Plans, America’s largest trade group, argued in a March letter to House GOP leaders that “Medicaid funding should be adequate to meet the healthcare needs of beneficiaries,” while noting that “the individual market and Medicaid are closely related.”

Amidst all these warnings, Health and Human Services Secretary Tom Price (pictured above) claimed this weekend that it was “absolutely not” the case the millions of Americans health care coverage was at risk due to the estimated $880 billion in cuts.

Nonetheless, it appeared at first that at least some House Republicans, particularly those from expansion states, were hearing those concerns.

Rep. Tom MacArthur (R-NJ) said at a townhall in March that his governor, Chris Christie, given him “ pretty dire predictions about what happens,” with the freezing of Medicaid expansion enrollment under the GOP bill.

Late last month, Rep. Mark Amodei (R-NV), a no vote on the initial bill, said, “The elephant in the room for me, really, is the Medicaid portion.”

MacArthur ultimately crafted an amendment, which zeroed in on the Affordable Care Act’s insurer mandates, that bridged the gap between hardline conservatives and moderates who had been resisting the bill. Amodei reversed his position on the GOP bill just hours before it was brought for a floor vote last week in a statement that said he had “concluded that the potential for Nevada deficits or expanded Medicaid enrollees being kicked off of Medicaid will be avoided.”

The only thing that has changed about the bill’s Medicaid provisions since the legislation was initially unveiled is an amendment, pushed by the conservative hardliners, to allow states to impose work requirements on certain enrollees. It will now be up to the GOP Senate to decide whether it will hold on to the House’s gutting of the program.