1. The per capita cap financing scheme burdens state budgets and harms children and families.

The House bill dramatically alters Medicaid’s financing structure. This restructuring would reduce federal funding, shifting the majority of the cost burden to states. As a result, states would be forced to ration important benefits for low-income children and families, placing their health and wellness at risk. These benefits include important access to preventive screenings to keep kids healthy. Roughly half of the 72 million enrolled in Medicaid around the country are children and almost 60 percent of children with disabilities rely on Medicaid for coverage and access to necessary health services.

Medicaid is a key tool to advance health equity. A Medicaid per capita cap would exacerbate disparities in health outcomes between white children and children of color. Capping Medicaid funding will result in lower provider rates, reduced access to care predominately in communities of color and low-income communities and separate and unequal health care systems.


2. The bill eliminates coverage for certain low-income school aged children and denies them access to important preventive services including vision, hearing and dental.

Children ages 6-19 are at risk of losing Medicaid coverage. The House bill reverses a requirement to cover all children under 19 up to 138 percent of the federal poverty level and allows states to roll back eligibility for school-aged children from 6-19 to pre-ACA levels. This would translate into higher costs for families and fewer benefits for school-aged children—namely, Early Periodic Screening, Diagnosis and Treatment (EPSDT)—an important set of benefits that ensures that children and adolescents receive appropriate preventive, dental, mental health, vision and developmental services. 

Children of color will disproportionately be hurt. For black children who are 6 times more likely to attend a high poverty school than their white peers, Medicaid is a lifeline that can help students access eligible health services inside school walls. These services include, but are not limited to, mental health services, substance use disorder screening and chronic care management (such as diabetes and asthma care). For children with disabilities, the risk, too, is great. Many school-aged children with disabilities require health services in school in order to participate and thrive. Rolling back access to Medicaid coverage threatens children’s health and long-term success.

 

3. Higher out-of-pocket costs combined with reduced tax credits bar families from accessing affordable coverage.

Higher cost-sharing and premiums force families to make difficult decisions about accessing care and making ends meet at home. For moderate-income families, the reduction in tax credits would make coverage out of reach. Over 1 million children rely on health coverage through Marketplaces and a cut to tax credits will impose an additional financial strain on parents. If the bill were enacted today, estimates show that families’ costs would increase by over $2,000. For families with income below 250 percent of poverty, costs would increase by over $6,000 on average. By 2020, when many provisions of the bill kick in, costs would increase by over $4,000 and over $9,000 for those living below 250 percent of poverty. These hikes in costs would be unsustainable for families.

 

4. Parents cannot access needed benefits to stay healthy and care for their children.

Healthy parents are able to care for their children, helping ensure that they thrive and become healthy adults. Winding down the Medicaid expansion would punish adult caregivers by limiting their access to needed care. The House bill would phase out the ACA’s Medicaid expansion by restricting current federal reimbursement to only continuously covered individuals. If Medicaid expansion enrollees experience a gap in coverage, the federal contribution reverts to pre-ACA levels. In addition to financially starving the program, the House bill strips down the benefit package by sunsetting the essential health benefits package for the Medicaid expansion population only.

The Medicaid expansion benefit package currently provides mental health and substance use disorder services as a core benefit. Eliminating these needed services puts families at risk, denying parents a pathway to good health and family unity. It is well-documented that when parents are healthy and have access to coverage their children are also more likely to be covered.

 

5. Cuts to Medicaid will have a ripple effect on state budgets and stunt innovation.

Healthy communities rely on more than just access to health coverage but also equitable access to safe neighborhoods, robust public schools and affordable housing. States work to balance the needs of their residents to ensure they can leverage multiple programs and resources to raise healthy families. Forcing states to shoulder the financial cost of Medicaid means that other important budget items would need to be reduced. These could range from public school budgets to public safety priorities. According to Center on Budget and Policy Priorities, per capita caps would shift $370 billion in costs to states over ten years. The House bill would also eliminate funding for the Prevention and Public Health Fund which would result in detrimental cuts to core public health programs including disease tracking, access to immunizations for low-income individuals and the prevention of and response to lead poisoning.

With a rise in cost burden, states would not have any funds to invest in innovative models of care that lead to smart program savings across the health care system. Medicaid coverage and adequate funding are the foundation for innovation, including testing methods that reward value instead of volume and address social determinants of health. The House bill’s per capita cap proposal would slash total federal Medicaid funding. Rather than increasing innovation, funding cuts due to per capita caps would hinder innovation and may even prevent it altogether.

Although it will undoubtedly undergo further revisions, we now have a pretty clear idea of what the House Republican health plan entails. At the same time, House and Senate leadership's political strategy has also come into focus.

With new information about both the policy and the politics, we can now answer the questions I posed last week: How will the Republican leadership plans solve the interlocking problems of getting their budget numbers to work and securing a majority in both houses of Congress without running into a firestorm of public opposition.

Let's take these questions in order.

Wealthy are winners, low- and moderate- income and older adults are losers

There is a two-part solution to the question of how to fill the budget hole created by the Republican commitment to give big tax breaks to corporations and high-income households. First, "replace" as little of the ACA as possible to keep spending down. So, although refundable tax credits are part of the Republican plan, the tax credits are much smaller than the ones in the ACA. As a result, individuals would on average pay an additional $2,400 and family costs would increase by over $4,000.

Two groups are particularly disadvantaged by the tax credit structure, which adjusts for age but not for income. The first is lower-income people of all ages – many will find that either they cannot afford coverage at all, or that a plan with affordable premiums comes with such high cost-sharing that it is not worth it. Since there would no longer be any penalty for being uninsured, many healthy lower-income individuals would simply go without coverage.

The second big group that gets hurt is older adults. Under the House plan, tax credits for the oldest enrollees would be twice as high as for the youngest, but premiums could be five times higher or even more at the discretion of states. That would again force many people to drop coverage. So, smaller credits and fewer enrollees means less spending to offset less revenue.

Shifting costs onto states, providers and Medicaid beneficiaries

The other part of the solution is to take a giant bite out of Medicaid. First, the Republican plan phases out the ACA's enhanced match for the Medicaid expansion population. While states would still be allowed to cover this group, it would cost them much more to do so. Secondly and even worse, there would be a huge reduction in federal support for the core Medicaid program that covers low-income children and parents, people with disabilities and seniors.

The version of the House bill that leaked last week capped federal matching payments for Medicaid beneficiaries but proposed to increase the cap at the rate of medical inflation plus 1 percentage point. While this could still cause a lot of problems for specific states and beneficiaries, this is actually higher than the average growth rate per Medicaid beneficiary (hence not generating a lot of savings). The new proposal reduces the growth rate of the cap to Medical CPI, but this is unlikely to be the final word. Of course, there is no CBO score, so what happens if the numbers still don't balance? Simply go back and cut Medicaid some more.

Damn the torpedoes, full speed ahead

So much for problem number one. What about problems two and three: public opposition and not enough votes in the Senate or the House (or both)? This is where secrecy and speed come in. Speaker Ryan and Leader McConnell are trying to jam legislation through their respective chambers before either the members, the voters or other stakeholders, including providers and governors, can figure out what is in it. That's why there was so much effort to keep the text secret until the last minute, why there will be no hearings, and why the committees are not bothering to wait for analysis from CBO, the CMS actuary or outside experts. The extensive damage the bill will cause will become clearer and clearer the more time the bill hangs out there, as will the disconnect between Trump's often repeated promises of affordable coverage for all and the reality of millions losing their coverage and rising out-of-pocket costs.

Will it work?

While we should not underestimate the pressure that party leaders can put on the rank and file to fall in line, the outcome of this debate is by no means settled. On the far-right, members are complaining that the leadership proposal does not repeal enough of the ACA and outside groups are mobilizing against the plan. Many employers also oppose the plan because in addition to the benefit cuts, it caps the income tax exclusion for employer-provided health benefits. And the deep cuts to Medicaid may be too much for governors of either party to swallow while adding new constituencies among both consumers and providers to the ranks of the opposition.

...Not if we can help it

Grassroots opposition has already had a dramatic impact on both the timing and the content of the health care debate this year. Additional pressure is needed now to slow down the renewed rush to dismantle health coverage for millions of people and force Congress to go back home and face the voters again in April before they take a final vote.

As Republicans struggle to come to agreement on how far to go with ACA repeal and what to put in its place, they are confronted with three interlocking math problems: first, how to make their budget numbers add up; second, how to put together a proposal that can command a majority in both the House and the Senate; and third, how to avoid running afoul of public opinion.

Where to Start?

Let's start with the budget problem. The budget reconciliation instruction only requires Congress to save $2 billion over 10 years, which is barely even rounding error in the context of overall federal health spending. It should be easy, right? But the complications begin immediately with the Republican commitment to repeal the taxes that helped pay for the expanded benefits in the ACA.

How to plug that hole? In the good old days of "repeal and delay" (about a month ago), you simply wiped out all of the ACA spending – including both the tax credits for marketplace coverage and all of the Medicaid expansion funds – and made some vague promises about fixing it later, someday, maybe (not!). But “repeal and delay” ran aground on the other two problems – public opinion, which is strongly against it (only 18 percent support this course), and that constituents have not been shy about making their objections known to their members of Congress.

As a result, there aren't enough votes to pass repeal and delay, so GOP leadership is in need of some kind of replacement plan. That replacement plan has to make good on Republican commitments to preserve access to coverage for people with pre-existing conditions and also has to avoid yanking Medicaid coverage (and funding) away from states. But preserving funding for the Medicaid expansion (even if the federal matching rate phases down over time) and creating a substitute for the ACA tax credits, even at reduced levels, eats up some of your savings, so you are still left with a budget hole.

How big a hole depends on how much of the expansion funding is preserved and how adequate are the new tax credits. The greater the funding preserved, the bigger the budget hole. But proposals to shrink the funding have fueled opposition in states that have benefited from the Medicaid expansion, including 16 states with Republican governors. It would also cause the number of uninsured to spike and do little to allay the public's fear that people with pre-existing conditions will again be locked out of the insurance market. 

A notable feature of the recently leaked draft House repeal-and-replace plan is that it tries to address these problems by providing more funding for the Medicaid expansion and for subsidizing private insurance than did previous proposals, such as the one authored by now-HHS Secretary Tom Price. But because at least a portion of the ACA funding is preserved, a sizable budget hole remains, although we don't know how big because no CBO score has yet been made available.

Fixing a Hole?

How is this hole to be plugged? Again according to the leaked plan, there are two additional revenue sources. One, involves cuts to the core Medicaid program; the other involves changes to the tax exclusion for employer-sponsored insurance, in the sphere of the ACA's "Cadillac tax" that places an excise tax on the most expensive health plans. But both of these revenue sources immediately run into trouble with respect to math problems two and three, above. The "Cadillac tax" is wildly unpopular with both the public and in Congress, across party lines. It is not at all clear that a majority of members will repeal the Cadillac tax only to turn around and support replacing it with something that essentially does the same thing.

On the Medicaid front, the House proposal is to continue to provide states with enhanced matching funds through 2019, but only for those beneficiaries who are currently enrolled. New enrollees would receive only the regular match rate. Starting in 2020, states would receive a capped amount for each beneficiary. The proposal calls for this capped payment to grow at the rate of medical CPI plus one percentage point. It's not clear that this adjustment factor saves a lot of money. If not, it then doesn't do much to fill the budget hole (running into math problem one).

The House Medicaid proposal differs significantly from another leaked proposal, this one developed by a number of Republican governors. In particular, the governors do not want to be forced to assume increased risk for the cost of care for beneficiaries who are jointly eligible for Medicare and Medicaid. (The "dual eligibles" account for over one-third of all Medicaid spending.) At the same time, at least some Republican governors seem perfectly comfortable with substantial Medicaid funding cuts as long as they have increased freedom to cut people off of Medicaid and reduce benefits for those who remain. Of course, this would just shift costs onto providers and beneficiaries. In essence, perhaps in an effort to keep senior citizens, people with disabilities and the providers who serve them on the sidelines, the governors' plan boils down to massive eligibility and benefit cuts for non-disabled adults and children.

Especially if the votes aren't there for tackling the tax-exclusion, then the Medicaid cuts would have to be deeper – much deeper – than what is laid out in either of the leaked draft proposals.  And benefits would likely be even skimpier both for Medicaid beneficiaries and in the private market. An analysis of the replacement plan based on documents released by Speaker Ryan suggests that millions would lose coverage. Such draconian cuts in health coverage would spark even more public outcry and could erode support in both the House and Senate, even though one House leader called a decline in coverage "a good thing" (again, see math problems two and three, above).

All in all, once the "original sin" of repealing the ACA taxes is committed, solving all three "math problems" – i.e., finding a way to make the budget numbers work while keeping a majority of support lined up in both the House and the Senate and not enraging the voters – adds up to a monstrous headache for Speaker Ryan and Leader McConnell. (Sad!)  Perhaps that's why former House Speaker Boehner predicts that the Republican effort to repeal most of the ACA will ultimately fail.

Let's hope he is right.

As February comes to a close, we want to pause and recognize Black History Month. Often Black History Month is accompanied with celebrations of history and accomplishments of black Americans. Many of these opportunities are the result of continued advocacy for civil rights and equity in labor, education, transportation, housing and health. Within this spirit of equity and advocacy, Community Catalyst is committed to weaving a health equity lens into our entire advocacy and programmatic work. Our vision of health equity is to create a society in which everyone has a fair opportunity to achieve their full health potential, regardless of the individual’s or population group’s race, color, religion, national or ethnic origin, immigration status, class, age, disability, veteran status, sexual orientation, gender, gender identity or gender expression.  

As we strive to achieve our vision of health equity, we must recognize the current reality of the health outcomes that black Americans face. Health outcomes can be impacted by number of different factors, from individual behaviors to systemic influences – the latter often referred to as social determinants of health, “the structural determinants and conditions in which people are born, grow, live, work and age.” They include factors like socioeconomic status, education, the physical environment, employment, and social support networks, as well as access to health care. Unfortunately, black communities have shown significant disparities across a number of health outcomes for many years. And many of these disparities are a result of inequities within structural systems and social determinants of health. Some cases in point: African American babies are twice as likely to die before age one as white babies; 73 percent of black children are more likely to be obese than white children; 60 percent of black adults are more likely to have diabetes than white adults.

Health disparities are detrimental to the health of our communities and country. Poor health outcomes in any group lead to poorer overall outcomes in our society’s educational attainment and economy. In order to understand the existing disparities among racial and ethnic communities and find effective solutions, we need to ensure that policies are in place that require the collection and reporting of data on disparities. Inadequate health data can mask unique patient and population needs and undermine effective interventions. In complete opposition to the goal of gaining more insight on disparities, a bill introduced in Congress last month specifically restricts using Federal (HUD) funds to "design, build, maintain, utilize, or provide access to a Federal database of geospatial information on community racial disparities or disparities in access to affordable housing." Bills like this are harmful to low-income communities of color and push our society backward rather than forward towards health equity.

As we continue to think about advocacy efforts to defend the Affordable Care Act and Medicaid, it’s also very important for advocates to consider the implications and impacts harmful policies can have on vulnerable communities.  Under the ACA, the uninsured rates for blacks dropped from 21 percent in 2013 to 13 percent in 2016. In states that decided to take up Medicaid expansion, blacks are less likely to be uninsured.  Defending the ACA and Medicaid is more than just defending access to coverage; it is about protecting human rights and moving towards realizing our vision for health equity.

Reflecting on Black History Month reminds us not only of the fights of the past, but of the continued fight forward for equity.

Amidst the noise of the national political landscape, it is important to remind ourselves that February is Black History Month. While this month serves to celebrate the accomplishments of black people in America, it is also a reminder of how inequality has, and continues to, plague many black communities. Health inequity constitutes one of the many systemic forces that perpetuate the marginalization of the same community we celebrate for its undeniable contributions to American society. In the words of civil rights playwright and activist James Baldwin, “Not everything that is faced can be changed, but nothing can be changed until it is faced.”

The challenge: Why must we act? Disparities persist.  2017 marks 53 years since the passage of the Civil Rights Act of 1964, key legislation that outlawed de jure discrimination based on race, color, religion, sex or national origin. And yet, half a century later, we still suffer the consequences of de facto discrimination across all axes in health such as disparate health outcomes, and/or access to affordable quality care. In fact, according to a Kaiser Family Foundation brief “disparities in quality of care are not getting smaller. Over time, the health disparities between Whites and African Americans, Hispanics, Asians, and American Indians/Alaska Natives has either remained unchanged or worsened for most of the core qualities measures of health.” The longstanding weight and trauma of racism has long-term consequences across the lifespan for people of color.

Adverse Childhood Events: A metric for trauma.  One health disparity among children garnering growing concern and attention is prolonged adversity (or trauma) in the absence of positive adult caregiver support. Researchers have used Adverse Childhood Experiences (“ACEs”) to categorize the many forms of early trauma. Not surprisingly, Black and Hispanic children – even at the highest income levels – are more likely than their white peers to experience adversity. Work led by Harvard University’s Jack Shonkoff illustrates how exposure to trauma and stress negatively affects brain development before the age of three. Further, research shows that trauma can have long-term psychological and physiological health impacts that exacerbate health disparities over generations if left untreated. This is a stunning reminder of the urgency surrounding health care coverage and access for children and parents throughout the life cycle – from preconception to a child’s transition into adulthood.

Despite this substantiated research, it is not standard practice for medical providers to inquire about the trauma history of their patients. Moreover, there are not enough financial incentives put forth by insurance payers to do so. A first step is to focus on parents, assessing their exposure to stress and trauma and providing tools and resources as they develop as parents and caregivers of young children.

But what can ACEs screening tool do?  There is reason to keep hope. We know that resilience – the ability to overcome hardship – can attenuate some of the impacts of significant adversity. Kids who have a supportive relationship with an adult caregiver are better able to build resilience. And while historically, African-Americans/Black people have found ways to build such resilience by employing faith, hope and community, these supports are simply not enough for many of our most vulnerable families and children who face persistent adversity.

These disparities emphasize the importance of implementing more targeted programmatic intergenerational policies and programs that focus on addressing the needs of both vulnerable parents and their children together in order to create cycles of opportunities for more families.

A validated ACEs screening tool would serve the dual purpose of employing a more strategic approach that properly identifies and provides social service resources to at-risk families in order to build supportive caregiver relationships.

Concrete pathways to action:  This is a difficult political environment, but it is more imperative than ever to focus on the health and wellness of our communities. If we know that our communities shape the conditions families face, and that families shape the conditions children grow up in, then we must urgently support families in strengthening their capacity for resilience so they can build that capacity amongst our children. In that vein, the children’s health team at Community Catalyst has developed an issue brief to support a shared understanding of ACEs, trauma and stress and the multi-generation policy approaches that support healthy families.

Over the next few months the children’s health team will be conducting a review of ACE’s legislation and programs across the country. This will include investigating initiatives that are Community-, Provider- and legislative- led to inform an issue brief for consumer health advocates and provider communities. We hope the resulting issue brief will serve as a call to action with the dual purpose of reminding us all why health equity work matters, and what vehicles providers, consumers and legislators can use to advance the ACE agenda.

Nana Yaa Misa, Children’s Health Initiative Intern