PT: Trump Medicaid Proposal Could Leave Some NYers Uninsured, Create $850m Budget Hole

NYAPRS Note: Medicaid advocates in New York are bracing for the potential impact of possible changes a Trump Administration might propose. Republicans have long favored block granting Medicaid to the states to give them greater flexibility and control. But these proposals have long been viewed by advocates for Medicaid beneficiaries like Medicaid Matters and NYAPRS as potentially “dangerous” measures that could lead to state roll backs on eligibility and program standards, cutting critically needed benefits and slashing state and provider budgets, positions that were well articulated to Politico today by Medicaid Matters’ Lara Kassell.
“The bottom line is that the state’s hands would be tied. If states are faced with billions of dollars less than expected, it could mean tightening eligibility rules and changing provider reimbursement. “[That] ultimately means there would be a significant number of people who will be uninsured,” Kassel said. “We know from experience and from data that the more uninsured people you have, the costlier it is overall.”

Further, states might roll back ACA inspired progressive state Medicaid initiatives and create large holes in state budgets. In one scenario, eliminating federal support for New York’s extension of Medicaid benefits to low income uninsured New Yorkers under our Basic Health (Essential) program could create an $850 million budget deficit.

Trump's Medicaid Proposal Could Leave Many New Yorkers Uninsured
By Addy Baird Politico November 10, 2016

President-elect Donald Trump’s campaign proposal to issue block grants for Medicaid could leave a significant number of New Yorkers without health insurance and force messy political fights, according to policy experts.

New York State and the federal government currently split the cost of Medicaid, an insurance program for low-income people, 50-50.

It's not yet clear what the Trump proposal could mean for individual states.

But one template experts are considering is a Mitt Romney-Paul Ryan proposal from 2012, which offered every state a set amount of federal funding, rather than matching funds, shifting costs more fully onto the states.

Ryan, now the speaker of the House, also favored Medicaid block grants in a 2016 proposal to repeal and replace the Affordable Care Act.

Advocates argue that relying on block grants, assuming they are tied to cutting federal spending, would encourage state Medicaid programs to reduce waste and abuse and save the federal government billions of dollars.

“The state governments know their people best and can manage the administration of Medicaid far better without federal overhead,” according to Trump’s campaign website, which offered few details. “States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.”

In 2012, when Ryan, who chaired the House Budget Committee at the time, proposed block granting Medicaid to the states in an effort to reduce federal spending by $810 billion over 10 years, the Kaiser Commission on Medicaid and the Uninsured estimated that New York State would lose 22 percent of the expected federal contribution over 10 years, which was about $103 billion in federal funding at the time.

The group also estimated that by 2022, 1.7 million people in New York would lose coverage because of the funding cuts. That was roughly one-third of the state’s Medicaid program at the time.

These numbers predate the Medicaid expansion coverage offered by the Affordable Care Act, which added roughly 1 million new people to the rolls, so the Kaiser Commission’s report provides only a glimpse of possible consequences.

The specifics, however, do not concern Medicaid advocates so much as the broad idea that money and, by extension, services would be diminished.

“The bottom line is that the state’s hands would be tied,” Lara Kassel, coordinator at Medicaid Matters New York, said Wednesday. “Block granting is a dangerous proposal.”

If states are faced with billions of dollars less than expected, it could mean tightening eligibility rules, changing provider reimbursement, or going back to the drawing board on health systems transformations.

“[That] ultimately means there would be a significant number of people who will be uninsured,” Kassel said. “We know from experience and from data that the more uninsured people you have, the costlier it is overall.”

Michael Sparer, chair of the Department of Health Policy and Management at Columbia’s Mailman School of Public Health, said block granting Medicaid won’t necessarily reduce fraud.

“While federal government plays a bit of a role in looking at fraud, it’s primarily provider-based fraud and that activity has primarily taken place at the state level,” Sparer said. “If you block grant Medicaid, it continues the formula you’ve had all along.”

Through Trump and Ryan appear to be on the same page, implementing a block grant proposal is certain to meet resistance from governors, both Republican and Democrat, who won’t want to give up the dollars on which they have come to rely.

“When you start changing the formula you get into serious political battle,” Sparer said. “Every governor will say they want more discretion, but they don’t want less federal money. … On the other hand, President-elect Trump is going to have a Republican Congress so he might be able to pull off a lot more than any of us could predict.”

As of now, Trump has proposed no plan for how to determine which states get how much money, an issue that Sparer said he thinks could fuel the infighting. “Some states would be winners and some states would be losers… depending on the formulas used to determine,” he said.

But if Trump, with the help of a Republican Congress, can get the formula right, block-granting Medicaid could force states to operate Medicaid programs more efficiently and savings could be used for other anti-poverty programs such as job training programs, Oren Cass, a senior fellow at the Manhattan Institute, said Wednesday.

“There are obviously many ways to design the block grant and Trump has not been very specific, but talking in general terms, a block grant does not by default force anyone to lose coverage,” Cass said.

But the central question Trump and Congress need to consider if block granting is put on the table is whether the block grants are a question of budget policy or anti-poverty policy, Cass said.

“We’re not going to improve the quality of Medicaid purely by saying it won’t grow as fast,” he said. “It might save money, [but if] you’re really just talking about budget policy, you’re not helping the poor at all.”

New York Could Face Budget Crunch If Obamacare Is Repealed
By Josefa Velasquez and Dan Goldberg Politico November 10, 2016

ALBANY— Fresh off a victory that gave them control of the White House and retained their grip on both houses of Congress, Republicans on Wednesday repeated their promise to repeal and replace the Affordable Care Act.

How that will play out remains to be seen. In the meantime, health insurance for millions of people in New York and across the nation hangs in the balance.

One thing seems clear for New York: if Republicans make good on that pledge, it could blow an $850 million hole in the state budget.

The Cuomo administration took advantage of the Basic Health Plan, also called the Essential Plan, a section of the ACA that offers low-cost, subsidized health insurance to people who do not qualify for federal Medicaid assistance.

Because New York State had been paying 100 percent of the costs for many people who did not qualify for federal Medicaid, the federal program saved the state $850 million per year.

“[Repeal] would be a disaster for the state budget,” said Assemblyman Richard Gottfried, chair of the chamber's health committee.

Asked about the potential budgetary implications of repeal, the state’s Department of Health would say only that the Cuomo administration will “review details of the incoming administration’s policies regarding health insurance.”

Trump’s proposal to repeal the Affordable Care Act, which provides health insurance for roughly 20 million people, would “obviously make balancing the state budget about a billion dollars more difficult,” Gottfried, a Manhattan Democrat, told POLITICO New York. “It makes fitting the Medicaid program under the global Medicaid cap almost a billion [dollars] more difficult.”

In its first year, the Essential Plan has enrolled almost 600,000 New Yorkers, and has “been an incredible boon for the state,” said Elisabeth Benjamin, a vice president at the Community Service Society and advocate of the program.

New York’s Essential Plan, which began in January, allows those who have incomes below 150 percent of the federal poverty level but do not qualify for federal Medicaid dollars to obtain free health insurance. Those with incomes between 150 percent and 200 percent of the federal poverty level ($17,820 - $23,760 for an individual; $36,450 - $48,600 for a household of four) pay a $20 per month premium. And there are no deductibles.

“The Essential Plan has been an amazing benefit for New York,” Benjamin said. “It certainly benefits consumers who get low cost coverage.”

New York State’s Medicaid program is required to cover low-income immigrants who are not yet citizens but are residing lawfully in the state because of a 2001 court ruling. Insurance access for this group will not be affected even if Republicans repeal the vehicle by which it is obtained.

However, President-elect Donald Trump could repeal President Barack Obama’s executive order relating to the Deferred Action for Childhood Arrivals, or DACA, program, which provided legal relief for undocumented immigrants brought to this country when they were children. Rescinding the DACA program would imperil the legal status of approximately 80,000 New Yorkers and disqualify them from receiving Medicaid under state rule.

A spokesman for the state’s budget office said it’s “extremely premature for such speculation.”

The new state budget will be released in January, just as a new Congress convenes.