GOP Healthcare Plan Shrinks Subsidies, Medicaid Expansion; $100b for Most Needy

NYAPRS Note: A draft of a bill to repeal Obamacare leaked Friday, revealing that Republicans in Congress aim to eliminate Medicaid expansion by 2020 and cap Medicaid payments to states, rather than funding open-ended matching grants.
As a result, New York would have to spend an additional $5.7 billion to maintain the expansion on its own, a 614% spending increase for the state, according to an analysis by the Center on Budget and Policy Priorities. Although the fate of existing waivers, including DSRIP, remains uncertain, the draft does include $100 billion in federal funding for state innovation grants to support coverage for the neediest Medicaid enrollees.

The future and impact of federal changes on Medicaid will be a primary topic at NYAPRS’ April 27-28th Annual Executive Seminar, which will feature presentations by Ron Pollack, Executive Director, Families USA, Chuck Ingoglia, Senior Vice President, Public Policy and Practice Improvement, National Council for Behavioral Health; James Lytle, Partner, Manatt, Phelps and Phillips and Bruce Feig, Senior Consultant, Sachs Policy and NYS Medicaid Director Jason Helgerson. More details and registration link later this week.

Field opposes ACA and Medicaid plans Outlined in Republican Policy Brief
Mental Health Weekly February 27, 2017

Mental health advocates and disability groups have raised concerns over the Affordable Care Act (ACA) repeal and replacement proposals outlined in the Republican policy brief that would include Medicaid block grants, per capita caps and other Medicaid program cuts that they say would cause beneficiaries with behavioral health conditions to lose vital benefits and services.

President Trump said he plans to submit a health care plan early to mid-March, according to The Hill. It remains unclear whether Trump’s referring to a plan that the White House would release on its own, which would throw off congressional efforts, or simply a joint plan with lawmakers introduced in Congress, The Hill reported.

Lawmakers are proposing to cut funding and establish funding caps to the Medicaid program. Additionally, the brief calls for a repeal of the Medicaid expansion and putting states in charge. Health care tax credits to assist with the purchase of health insurance on the individual insurance market are also being proposed.

“This brief is troubling,” Nicole Jorwic, director of rights policy for The Arc, told MHW. It puts the repeal of the ACA on the back of major cuts to Medicaid either as a block grant or a per capita cap.

“Both of the funding proposals are financial mechanisms with the same results that would impact those with disabilities, including individuals with mental disabilities,” she said. The brief, at best, could be considered an outline of what Republican leaders would consider essential to repealing and replacing the ACA, said Jorwic, who also cochairs the Long Term Services and Supports Task Force for the Consortium for Citizens with Disabilities.

There are a number of critical areas not touched upon in the brief, she noted, such as rehabilitative and habilitative devices and mental health services — provisions that would be available under the ACA.

Block granting Medicaid and putting it on a preset formula would not be based on the actual cost of service, she said. “The per capita cap is going to be seen as a compromise; however, the effects could be just as drastic,” Jorwic said. Lawmakers are proposing to create cap payments per enrolled via a preset formula that is not based on the actual cost of care, she said.

Tax Credits
Tax savings accounts and universal tax credits to help pay for insurance are concerning, Bethany Lilly, deputy director of policy and legal advocacy for the Bazelon Center for Mental Health Law, told MHW. The ACA addresses challenges people with disabilities have with health care at large, she said. Getting rid of it would cause problems, she said.

A little under one-third of the people in the Medicaid expansion have a behavioral health condition; this is a population that definitely needs health insurance, she said. The policy brief appears to propose “that everyone participating in the Medicaid expansion is not as deserving as those on traditional Medicaid,” she said. “That’s not a fair distinction.

Financing Mechanism
According to the brief, at the beginning of a year in the future, a total Medicaid allotment would be available for each state to draw down based on its federal medical assistance percentage. The amount of the federal allotment would be the product of the state’s per capita allotment for major beneficiary categories — aged, blind and disabled, children, and adults — multiplied by the number of enrollees in each group.

The per capita allotments for each beneficiary group would be determined by each state’s average Medicaid spending in a base year, grown by an inflationary index, the brief stated.

Block grant funding would be determined using a base year and would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage.

States would have flexibility in how Medicaid funds are spent but would be required to provide required services to the most vulnerable elderly and disabled individuals who are mandatory populations under current law.


Exclusive: Leaked GOP Obamacare Replacement Shrinks Subsidies, Medicaid Expansion

The Replacement Would Be Paid for by Limiting Tax Breaks on Generous Health Plans People Get at Work.
By Paul Demko POLITICO February 24, 2017

A draft House Republican repeal bill would dismantle the Obamacare subsidies and scrap its Medicaid expansion, according to a copy of the proposal obtained by POLITICO.

The legislation would take down the foundation of Obamacare, including the unpopular individual mandate, subsidies based on people’s income, and all of the law’s taxes. It would significantly roll back Medicaid spending and give states money to create high risk pools for some people with pre-existing conditions. Some elements would be effective right away; others not until 2020.

The replacement would be paid for by limiting tax breaks on generous health plans people get at work — an idea that is similar to the Obamacare “Cadillac tax” that Republicans have fought to repeal.

Speaker Paul Ryan said last week that Republicans would introduce repeal legislation after recess. But the GOP has been deeply divided about how much of the law to scrap, and how much to “repair,” and the heated town halls back home during the weeklong recess aren’t making it any easier for them.

The key House committees declined to comment on specifics of a draft that will change as the bill moves through the committees. The speaker's office deferred to the House committees.

In place of the Obamacare subsidies, the House bill starting in 2020 would give tax credits — based on age instead of income. For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal. A related document notes that HHS Secretary Tom Price wants the subsidies to be slightly less generous for most age groups.

The Republican plan would also eliminate Obamacare’s Medicaid expansion in 2020. States could still cover those people if they chose but they’d get a lot less federal money to do so. And instead of the current open-ended federal entitlement, states would get capped payments to states based on the number of Medicaid enrollees.

Another key piece of the Republican proposal: $100 billion in “state innovation grants” to help subsidize extremely expensive enrollees. That aims to address at least a portion of the “pre-existing condition” population, though without the same broad protections as in the Affordable Care Act.

It also would eliminate Planned Parenthood funding, which could be an obstacle if the bill gets to the Senate. And it leaves decisions about mandatory or essential benefits to the states….

Other changes proposed by Republicans align with previous ideas for strengthening the individual insurance market, which has been unstable under Obamacare with rising premiums and dwindling competition. For example, the legislation would allow insurers to charge older customers up to five times as much as their younger counterparts. Currently, they can only charge them three times as much in premiums. The insurers have been pushing for that change.

The proposal also includes penalties for individuals who fail to maintain coverage continuously. If their coverage lapses and they decide to re-enroll, they would have to pay a 30 percent boost in premiums for a year. Like the unpopular individual mandate, that penalty is designed to discourage individuals from waiting until they get sick to get coverage