Posts About Medicaid and Medicaid Expansion

Despite his repeated promises on the campaign trail that he would not cut Medicaid, President Trump’s FY 2018 budget would slash the program’s budget nearly in half over the next decade. The budget assumes the $839 billion in Medicaid cuts in the American Health Care Act (AHCA) become law, and then calls for an additional $627 billion in cuts to the program, all while slashing other safety net programs too.

An attack on health and economic security for low-income communities

Cuts of this magnitude would put at risk the health of the millions of older adults, people with disabilities, children and low-income families who depend on Medicaid for their care. They would undermine a program that is essential to the fight against the opioid epidemic. And they would rock the economic security of low-income communities, who depend on Medicaid coverage to protect them against crippling medical debt.

What’s more, the Trump budget pairs these Medicaid cuts with deep cuts to other essential health and social welfare programs - like food stamps and disability insurance. Together, these programs not only boost economic security for low-income families, they also contribute to health security by putting healthy foods and safe housing within reach of families who could not otherwise afford them. By slashing these programs alongside Medicaid, the Trump budget is an all-out attack on the health and economic security of vulnerable communities.

A wakeup call for America’s governors

While many governors have expressed concern about how the AHCA ends the enhanced funding for the ACA’s Medicaid expansion, they have said relatively little about how it also turns Medicaid into a per capita cap. This budget should be a wake-up call for those governors: per capita caps are a Trojan horse that will allow the federal government to balance its budget at the expense of state budgets.  

While budget documents don’t make it entirely clear how the administration would achieve over $600 billion additional savings in Medicaid, Trump’s budget director Mick Mulvaney explained that the additional funding cuts result from a reduction to the growth rate for the per-capita cap, compared to the AHCA. That’s just a backdoor way of shifting Medicaid costs from the federal government on to states.

The Trump budget exposes as wishful thinking any assumptions that governors may have made that they could weather the AHCA’s cuts to Medicaid by utilizing additional “flexibility”. The AHCA doesn’t merely make $839 billion in Medicaid cuts; it creates a dial that Congress and the administration can and will ratchet down any time they want additional savings. The $1.47 trillion in Medicaid cuts inherent in Trump’s budget this year is likely just the beginning.

Additional cuts targeted at children

Trump’s budget also targets the Children’s Health Insurance Program (CHIP), which provides health insurance to children of low- and moderate-income families who are not eligible for Medicaid. In 2016, CHIP covered nearly 8.9 million kids, while Medicaid covered about 37 million. Together with Medicaid, CHIP coverage has helped lower the uninsurance rate for children to a historic low of 4.8 percent.

CHIP is currently funded through September 30, 2017 but will need another funding extension in order to continue past that date. The Trump administration’s proposed budget would extend CHIP funding for only two years despite the recommendation from the Medicaid and CHIP Payment and Access Commission to extend funding for five years.

The proposed budget would end the higher federal CHIP matching rate known as the 23 percent bump and eliminate the Affordable Care Act’s Maintenance of Effort requirement at the end of September—two years earlier than the ACA intended. It also assumes the AHCA provision that rolls back eligibility for school-aged children from 138 percent FPL to 100 percent FPL—potentially affecting millions of children. We know that Medicaid and CHIP disproportionately cover children of color, so not only is this a loss in coverage but a step backward in our efforts to address health equity.

Trump’s budget would further undermine CHIP’s efficacy by eliminating federal enhanced matching funds to children above 250 percent of the Federal Poverty Level. This is particularly problematic because in many states CHIP eligibility extends beyond this marker. For example, Alabama provides CHIP coverage up to 317% FPL and New York goes up to 405% FPL. By capping these CHIP eligibility levels, the Trump budget reduces state flexibility in meeting the needs of children. Overall, the Trump administration’s budget does not help advance children’s health, instead it puts us in danger of reversing our hard won coverage gains.


It’s May, and that means it’s Older Americans Month. This year’s theme is Age Out Loud, chosen “…to give aging a new voice – one that reflects what today’s older adults have to say.”

Older Americans are a group that have a lot at stake in ongoing health system transformation initiatives. A vital goal of the Center for Consumer Engagement in Health Innovation is promoting the meaningful role older consumers can exercise when they lift up their voices. Several of our staff members recently met an older adult who perfectly exemplifies what it means to stand up and speak out loudly for better health out of one’s own life experience. Kathy Paul is a 69-year-old resident of Lynn, Massachusetts and an active member of the Massachusetts Senior Action Council. The Council, founded in 1981, is a statewide, grassroots, senior-led organization that empowers its members to use their own voices to address key public policy and community issues that affect their health and well-being.

Kathy spoke out loudly at a press conference in Boston on May 8 [video courtesy of BNN – Boston Neighborhood Network] on the American Health Care Act, a bill that would result in significant cuts to care for older adults. The bill was passed by the U.S. House of Representatives and is now pending before the Senate. Kathy joined Sen. Edward Markey and other community leaders at the event, including speakers from Health Care For All, Community Catalyst, Health Law Advocates, Boston Medical Center GROW Clinic, Disability Advocates Advancing Our Healthcare Rights, Massachusetts Senior Action Council, Massachusetts Organization for Addiction Recovery, the American Cancer Society Action Network and the American Heart Association.

Kathy introduced herself “…not just as an activist, but as a mother of five, a grandmother of 10, and a great-grandmother of five, who is deeply concerned about the future of health care.”

She continued: “As a senior, I live on a very limited fixed income and I rely on MassHealth [the Massachusetts Medicaid program] for my health care. I feel very fortunate because, for the most part, I am very healthy. I don't take any medication and stay very active. But I know the reality of when that's not the case. My husband had several very serious health conditions including diabetes and kidney failure. He had to endure two amputations below the knee and was on dialysis three times a week. If it was not for MassHealth, we would never have been able to cover his care. I am thankful that I was able to focus on taking care of him rather than worrying about how we would pay for the care he needed or being denied because we did not have the money to meet a huge deductibleThis debate is not about party politics. This debate is about the wealthy getting wealthier and the rest of us paying the price. We cannot allow this assault on our right to basic health care to move forward. We must speak up and speak out.”

Kathy first got involved with the Massachusetts Senior Action Council in 2007, while her late husband was still alive and she was putting most of her energy into the demands of caring for him. After he passed away in 2012, it was a turning point in her life. She explains, “With more time on your hands, what do you do? Just sit in the house, stare at the walls and complain, or get out and do something about it? What our group likes to say, ‘we don’t just take it, we take charge!’”

In recent years, ‘taking charge’ for Kathy has meant testifying at the Massachusetts Statehouse against rate hikes for older adults using public transportation services and advocating for genuinely affordable housing options for older adults in the Commonwealth. And on a Monday morning in May, it meant joining hands with her United States senator and telling her story from the podium to a bank of television cameras and assembled reporters.

We can’t wait to see what she’ll do next.

During this month, let us know at @ccehi how you #AgeOutLoud!

With our thanks to Kathy Paul for her guest contributions to this post.

There are already reams of postmortems about last week’s collapse of the drive to repeal the Affordable Care Act. It will probably become a case study for students of policy and politics (file under "what not to do"). Nevertheless, with the benefit of a few days of reflection, we can reach some good conclusions about what went down and draw some lessons for the future.

Why Did the AHCA Fail?

There is no shortage of figures to credit (or blame, depending on your point of view) for the demise of the American Health Care Act (AHCA): Democrats (in general and former Obama officials, in particular); the Freedom Caucus in the House; House Speaker Paul Ryan; the organizers at MoveOn and Indivisible; the Trump administration's own incompetence; and even the GEICO lizard. So, what really killed the AHCA?

There is some truth in the answer "all of the above" (well, maybe not the lizard). Part of the reason is indeed the division within the Republican Party and the extremism and intransigence of many of its members. The reason GOP party leaders did not have a workable replacement plan ready to go by now should be obvious, and it is not solely because there was no point in doing the heavy policy and political lifting while Obama was president. Republican political leaders didn’t have a replacement plan ready because a large segment of the party is unwilling to confront the fact that the pillars of the ACA – competitive private insurance markets, tax credits for affordability and some kind of hedge against free-riding/ adverse selection--are essentially Republican health policy.

Even the minimal inclusion of these elements in AHCA, sweetened with big tax cuts for the rich and a big Medicaid cut, were too much for the Freedom Caucus. This is the same group of extremists that shut down the government back in 2013 and drove John Boehner (who must be laughing his head off) from the speakership.

In an effort to appease this faction, the “finished product” that almost reached the House floor didn’t stop with cutting the tax credits and Medicaid coverage the ACA provided. It undermined care for millions of children, seniors and people with disabilities, included a whopping premium increase for older adults and created a new opportunity for insurers to deny coverage to people with many serious and chronic conditions. “Trumpcare” (or “Ryancare,” if you prefer) was also a major economic blow to providers of care and state budgets. In short, it was not just an attack on the health and economic security of millions of people, it was a full-frontal assault on an economic sector that accounts for millions of jobs and about one-sixth of all the economic activity in the country.

But blaming the Freedom Caucus lets too many others off the hook. Let’s not forget that Speaker Ryan was actually the chief architect of the bill, which the Trump administration enthusiastically embraced.

This Is What Democracy Looks Like

Intra-party infighting has gotten a lot of press coverage, but it is only part of the story, and not the most important part. The rapid mobilization of opposition was critical. It forced Republican leaders to abandon their "repeal and delay" strategy and put an alternative to the ACA on the table. Once people got a good look at “replace” – 24 million losing coverage, $880 billion in reduced federal support to states, job losses, higher out-of-pocket costs – and heard the compelling stories of people whose health and lives would be in jeopardy, thousands took to the streets and flooded the Congressional switchboard in protest.

Nor was this just a victory of the "left" or a small set of organizations or individuals. It was a victory for an ideologically heterogeneous public engaging in civic action to stop a narrow faction of extremists bent on undermining their health care. You cannot mobilize people around something about which they do not care. Fortunately, people care about health care. Above all, as David Brooks succinctly summed up, “The Republican Health Care bill failed because it was a bad bill that had almost no authentic public support. It took benefits away from tens of millions of vulnerable people in order to give tax breaks to the rich few.” It turns out that health care is too important and too personal to be used as a stalking horse for a big tax cut for the rich.

What Were They Thinking?

In hindsight, it is less remarkable that the American people soundly rejected this atrocious legislation and more surprising that its backers had the gall to bring it forward in the first place. However, despite this ignominious defeat, there is no indication that Trump or the Congressional Republicans have shifted into genuine problem-solving mode. They are still wedded to their narrative about how terrible the ACA is and unwilling to make peace with the idea that everyone should have access to affordable, meaningful coverage. Moreover, they are still scheming to bring another terrible repeal bill back to the floor or to undermine the ACA via administrative means.

No Time for a Victory Lap

In recent days, Speaker Ryan has indicated that he is not giving up his dream of cutting people off health care, which he has nursed since his frat-party days. And HHS Secretary Price has refused to commit to effective implementation of the law. Faced with all of these threats, there is a real risk that insurers will either pull out of the program or demand another big premium increase as a hedge against the uncertainty. Activists must be prepared to expose and push back against the next wave of attacks. But we must also do more.

Despite the gains made by the ACA, there are real problems in our health care system. These problems demand real fixes, not a toxic stew of tax cuts and ideologically driven nostrums that will make things worse, not better.

That means we need to advance policies to ensure adequate choice of plans, help the people who still cannot afford their premiums and reduce high cost sharing especially for people with chronic conditions that will cause them to hit their out-of-pocket maximum year after year. We need to confront the persistent racial disparities in health coverage and outcomes. We also need to address issues the ACA left unaddressed, such as high drug prices and inadequate coverage for services that allow older adults to stay in their homes.

Making progress on these fronts will require us to internalize two important lessons from recent events.

First, be prepared. While prospects for progressive action in Washington, DC and in many states may look dim right now, articulating a vision of what we are for and doing the policy work to back it up will help us make the most of opportunity when it arrives. Being prepared also means talking to the public to ensure that the proposals we advance have popular support.

Second, build unity. Democrats were greatly aided by their unity in opposition to AHCA, as were Republicans when they were in the opposition. However, building unity around what you are for is much harder than building it around what you are against, as we just saw. A lot of work went into building not just the policy but the political consensus that resulted in passage of the ACA and it extended far beyond elected officials. That consensus, which also led to the defeat of AHCA, included a broad swath of consumer, civic, faith and patient advocacy organizations, as well as most other health care stakeholders. We need similar unity now to advance solutions that address the real pressing problems we still confront.

The recent debate has shown that people are hungry for real solutions to their health care problems, not snake oil falsely marketed as “patient-centered” care. Our task in the weeks and months ahead is to build momentum for the former while continuing to defend against the latter.

 

I would venture to guess that congressmen Paul Ryan and Joe Kennedy don't agree on too much, but one thing they do appear to agree on is that the ineptly named American Health Care Act (aka Trumpcare) is first and foremost a bill about cutting taxes. Ryan trumpeted the bill as a $1 trillion tax cut and seemed entirely unfazed by the fact that the beneficiaries of the tax break were overwhelmingly the richest households and big drug and insurance corporations. Meanwhile, Rep. Kennedy denounced the bill as "a tax cut wrapped up as health care" and called it "an act of malice rather than mercy" in a statement that went viral on YouTube.

And the Congressional Budget Office (CBO) has made it crystal clear who would pay for that tax cut: working families and especially older adults and people with disabilities. CBO projects that should AHCA become law, 24 million people would lose their health insurance – that's 80 percent of the number projected to lose coverage with a full repeal of the ACA. The financial assistance that makes coverage affordable for people who lack employer-sponsored insurance would be cut almost in half and would be restructured in a way that provides more assistance for the middle class but dramatically scales back help for people with more modest incomes.

Promises Made, Promises Broken

Ironically, the biggest losers under Trumpcare are the voters who provided President Trump with critical support during the election. For example, A 60-year-old person with an income of $30,000 would see her or his assistance shrink by an average of $6,000 per year. Many Trump supporters are now nervous that their coverage will be taken away, but in the face of all evidence to the contrary, some still cling to the hope that their candidate will not abandon them.  (Adding insult to injury for older adults, Trumpcare undermines Medicare's financial stability, despite Trump’s repeated promises not to cut the program. And the President’s budget called for eliminating federal funding for the meals on wheels program, among many other domestic program cuts.)

However, the greatest damage of Trumpcare may not be to the non-group insurance market, but to the Medicaid program. Notwithstanding his campaign promises, the legislation that Trump is backing "1,000 percent" would cut $880 billion in federal support for Medicaid. Cutting Medicaid would apparently fulfill a dream Paul Ryan has had ever since he was attending college keg parties… But the consequences for children and families, people with disabilities and seniors, should his dream become a reality, are serious. Capped funding would put states in a financial straightjacket, making it harder for them to meet the growing need for long-term services and supports or to respond to a disease outbreak like Zika or address the opioid addiction epidemic. Trumpcare would also force most states to abandon the recent expansion of Medicaid to more low-income adults.

Things Will Get Worse Before They Get Better

Not satisfied with inflicting all of these coverage losses, the most conservative members of the House are trying to make the bill even worse, and seem to be succeeding, at least for now. As the bill made its way through the Budget Committee, the committee took non-binding votes in favor of a more rapid phase-out of Medicaid funding for the 31 states that expanded the program under the ACA, making eligibility for non-disabled adults contingent on work and giving states more power to eliminate benefits or services for Medicaid beneficiaries. It is likely that some or all of these ideas will get converted into amendments in the House Rules committee where the bill is heading later this week before it goes to the floor.

While House leaders are trying to project confidence, the fate of the legislation in the House (let alone the Senate) is still unclear. Many of the most far-right members of the Republican House are still not on board. At the same time, changes meant to appease them could force some of the party's more moderate members – especially those in districts carried by Hillary Clinton – to think twice before voting to support a bill that would increase costs and cut coverage for thousands of their constituents. Many are unhappy with being asked to take a tough vote for a bill that could die or get substantially reworked in the Senate, and some have come out in opposition. Speaker Ryan is trying to keep these members on board by providing some additional help to older adults, but whether this will be enough to secure passage for the legislation in the face of opposition from health care providers, governors and concerned constituents remains to be seen.

Reviews are in on the House GOP health care plan, which has been enthusiastically embraced by President Trump, and they are pretty terrible. The plan has been panned by nurses, doctors, hospitals and insurers as well as organizations representing older adults, cancer patients and others. But don't take their word for it, most of the conservative health policy establishment also gives the bill a failing grade. Setting aside the far right ideologues (who also hate the bill, but for different reasons) ACA critics have, among other things, called the plan "worse than Obamacare itself" and say there is "little doubt it will price millions out of the health care market".

Our dystopian health care future under ACHA

Thanks to the ACA, the percentage of uninsured people in the U.S. has dropped to an all-time low. But that progress would be reversed under the GOP’s proposed plan. The Brookings Institute estimates that 15 million people would lose coverage. The combination of reduced tax credits, increased out-of-pocket costs and weak incentives to enroll would touch off an adverse selection spiral that would push premiums higher and cause even more people to drop coverage.

These changes are only the tip of the iceberg. Cuts to the Medicaid program would also force millions more to lose coverage. Cuts to Planned Parenthood would result in an increase in unplanned pregnancies and a significant decrease in health care access for millions of women and LGBTQ people. As the dominoes continue to fall, providers would begin to see revenue go down as uncompensated care costs rise, leading to service cutbacks, layoffs and in some cases, especially in rural communities, hospitals would be at a heightened risk of closure. Resources to combat the opioid crisis would be lost and states' capacity to finance long term care for older adults and people with disabilities would be undermined just as the need increases due to the aging of the baby-boom generation.

It would only get worse as it moves through the House (if it does). The bulk of the discussion in the House has been with the far-right Republican Study Committee and even farther right Freedom Caucus who are demanding more cuts to the Medicaid program. With only 22 votes to spare, it is likely that Speaker Ryan will accommodate their demands and Pres. Trump has already signaled that he is on board.

Why is the bill so bad?

Why have the Republicans produced such a bill so bad that even their own policy experts think it is a disaster? The answer is that the repeal and replace debate has always been a political exercise driven more than anything else by the needs of far-right House members in deep red districts. Their biggest fear is that what happened to Eric Cantor (a successful primary challenge from the right in case you forgot) will happen to them. Their goal is to vote on a bill that hews as closely as possible to the Heritage Action orthodoxy. Whether that bill actually offers a framework for workable health policy or even whether it ever becomes law are secondary concerns.

And while House districts are becoming less ideologically diverse, the bill that is emerging is very bad for a number of states with key Republican Senators.

Consider West Virginia; the state has seen one of the biggest drops in the percentage of uninsured in the country thanks to both Medicaid expansion and ACA tax credits. Additionally, there has been a huge expansion in access to treatment for substance use disorders. As a relatively rural state, both West Virginia’s hospitals and rural consumers would be big losers as coverage declines.

Or consider Alaska; no state in the country would feel a bigger impact from the rollback of health insurance tax credits. On average people in Alaska would receive $10,000 less than they do now.

Or take Arizona, a state with a lot of early retirees and a rapidly growing elderly population. Proposals to increase insurance costs for older adults and cut funding for Medicare could prove very unpopular. And a squeeze on Medicaid funding would undermine the state's successful Medicaid expansion as well as its ability to finance long term services and supports for its aging population.

Maine is in a similar situation even though it did not take up the Medicaid expansion. With the oldest median age population in the country as well as being a relatively low-income state, increases in insurance costs for older adults and decreased Medicaid funding would hit the state hard.

It's no wonder that senators from these states have expressed reservations about the emerging legislation. And it is still unclear that, given differing political dynamics between the House and the Senate, there is enough common ground between the two branches to get a bill through.

Sen. McConnell is a skillful and determined party leader, but success of a bill with consequences as disastrous as this one be might actually be worse for Republicans than failure. Pres. Trump has already put Plan B on the table -- let it (cause it) to fail and blame the Democrats. While they would never admit it openly, some Republican Party leaders may secretly prefer continuing to have a weakened ACA to kick around for a couple more years. If they succeed in passing a law, then they would own the consequences of Trumpcare and it ain't going to be pretty.

All this suggests that the debate over the direction of health policy is far from over regardless of the outcome of ACA repeal efforts over the next few weeks. If a bill passes, Republicans will feel a need to put lipstick on the pig (an effort that will probably be much better financed than defense of the ACA ever was). However, as coverage declines and the effects ripple through providers, state budgets and communities across the country, it will be hard for them to escape the blame. If the legislation fails, expect ongoing efforts to undermine the ACA through administrative action (and inaction) along with efforts to pin the blame for the resulting problems on the law itself. Either way expect the fight to carry right into the 2018 election.

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.

Yesterday, House Republican leadership released another "replacement plan," the Obamacare Repeal and Replace Policy Brief and Resources. After nearly seven years, Republicans continue to call for replacement of the Affordable Care Act but have yet to put forward a plan that offers any clarity to consumers, let alone the same protections and coverage gains currently available under the Affordable Care Act (ACA). The announcement of yet another messaging document masquerading as a replacement plan continues that trend. Once again, in spite of much fanfare and self-congratulation, House Republicans still failed to present agreed-upon legislative language. The white paper released yesterday includes only high-level descriptions on some possible aspects of replacement while leaving key details missing.

Despite Republican protestations, the ACA has greatly improved the affordability of coverage available to consumers. The ACA has provided low- and moderate-income individuals and families with hundreds of billions of dollars in tax cuts to help make health insurance more affordable. And a majority of consumers using Healthcare.gov have been able to find plans with premiums below $100 after taking into account financial assistance.  Although most marketplace enrollees like their coverage, the main thing people want from health reform is lower out-of-pocket costs.

Yet instead of building on the current law, Republicans keep on releasing proposals that would undermine the coverage gains we have made under the ACA, leave families with fewer benefits and higher out-of-pocket costs, and dismantle Medicaid’s critical safety net. Rather than a detailed consensus for specific legislation, the Obamacare Repeal and Replace Policy Brief simply reiterates a grab-bag of recycled Republican policy ideas that fail to provide true protection for consumers.

For example, the tax credits offered under the Republican plan would not be adjusted based on income. Under this proposal, a family earning $150,000 would get just as much help as a family earning $25,000. People with fewer resources would likely get far less help affording premiums than they get today, which essentially amounts to a tax increase for these families and would likely put coverage out of reach for them. The proposal also encourages use of health savings accounts to supplement high-deductible health plans and the establishment of high-risk pools to aid individuals with pre-existing conditions. None of these policies makes coverage more accessible or affordable to low-income consumers and in reality would increase out-of-pocket costs when consumers can least afford it.

The GOP plan would also dismantle the Medicaid program as we know it. Their proposal to phase out Medicaid Expansion would reverse the progress made under the ACA to extend health insurance to low-income adults. And the proposal to cap and slash federal funding through per capita caps and block grants would push massive costs onto states and erode the health care safety net, putting coverage at risk for tens of millions of children, older adults and people with disabilities.

The Republican leadership's continued reliance on concept papers and rhetoric – instead of real proposals backed by concrete numbers and analysis – shows just how far they are from having a plan that can deliver on the promises they have made to replace the ACA with something that is both better and cheaper. Ultimately, these plans are a distraction from the real issue at hand – whether Congress will vote for a reconciliation bill that takes coverage away from millions and raises costs for millions more without any consensus on what, if anything, will come next.

One of the most shameful failures of our public safety net system is when structural harm goes unaddressed. The lead crisis in Flint, Michigan remains a painful reminder of when blind commitment to cost savings results in irreversible harm for an entire generation of children and families. The city of Flint is a low-income, majority black community—and it does not go unnoticed that this low-income, majority community of color, is the recipient of cost cutting efforts. The lead crisis in Flint – a crisis that is ongoing and will be for years to come—highlights the importance of public health and equitable infrastructure investment as a clear path to improving health outcomes and advancing health equity. Despite the high profile reporting on Flint, over 4 million children in the U.S.  live in homes with high levels of lead. This is heartbreaking – and unacceptable. States and communities are not without tools to demand and require lead exposure prevention programs and abatement in homes, in schools and in our water systems to ensure healthy living conditions for low-income children and families.

Cindy Mann, the former head of Medicaid at the Centers for Medicare and Medicaid Services, and her colleagues at Manatt recently highlighted a key tool in this battle: the Children’s Health Insurance Program (CHIP). Within the CHIP program, there is an opportunity for states to use a portion of their CHIP funds for a Health Services Initiative (HIS). As outlined in Manatt’s brief, it does not require a CMS waiver, it does not need to be a statewide effort and it does not require that only Medicaid- and CHIP- enrolled children benefit from the initiative. It does require a state to demonstrate need, meet program requirements that communicate how it will meet the needs of the targeted group and the program must have a clear timeline. Mann and her colleagues note that a majority of states have not yet taken up this opportunity—and have room in their CHIP budgets to do so.

Thanks to the Affordable Care Act (ACA), states are able to draw down a CHIP enhanced match through September 2019. While access to this enhanced match remains unclear beyond September (CHIP needs to be refunded by September 2017), there is opportunity now for states to address the needs of low-income communities. Advocates can play an important role in highlighting this opportunity for key decision makers and communities.  

We know that children’s health and wellness requires more than access to health insurance coverage. Children’s health is shaped by their surrounding environment—clean drinking water, stable and safe housing, nutritious foods and nurturing caregivers and community. All of these basic needs when knit together, blanket children with health opportunity. We know that for many children, this is not their reality and that the systems that serve them continue to struggle to identify needed resources, coordinate their work and reach the most vulnerable families. CHIP remains a key tool in helping states not just increase access to coverage and care but also create a healthier environment.

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