A Republican proposal to change how Medicaid is financed could save the federal government up to $150 billion, according to a new report. Block-granting Medicaid—when states receive a set amount of federal money to put towards the program—would result in $150 billion less in federal Medicaid spending over five years, according to an analysis released Monday by Avalere Health. Shifting to per capita caps—when states receive a set amount of federal money per beneficiary—would save $110 billion over five years, according to the analysis.
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Senate Democrats have pummeled Rep. Tom Price, President Trump’s pick to lead the Department of Health and Human Services, for supporting Medicaid block grants, but it’s a policy unlikely to win a place in Republicans’ Obamacare repeal-and-replace plan.
If Republicans succeed in making significant changes to Medicaid, they more likely would turn to a more moderate per-capita system embraced by a wider swath of Republicans. Like block grants, a per-capita system would limit federal contributions, but it would allow federal assistance to rise with enrollment growth.
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On the question of what should be done about Medicaid expansion under Obamacare, Republicans should combine two ideas popular in their party: block grants and health savings accounts. The former would let states tailor their Medicaid policies to their local communities, while the latter would give enrollees the ability to choose their own insurers and providers. In essence, Washington could give the states Medicaid block grants, allocated per capita, to provide beneficiaries with high-deductible insurance and health savings accounts.
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House Republicans on Wednesday highlighted changes to Medicaid in a series of bills that target eligibility, but got stiff pushback from Democrats who argue the GOP actually wants to cut federal aid to low-income Americans.
A subcommittee of the House Energy and Commerce Committee examined three draft bills that would prevent lottery winners and illegal immigrants from getting Medicaid coverage. Another bill would close a loophole that allows couples to get Medicaid although their income and assets are beyond the threshold for eligibility.
Republicans argued the bills, introduced in earlier Congresses, are needed to reform an entitlement program that has used more and more federal funding.
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Since its passage in 1965, Medicaid has expanded and contracted with the political tides. With concurrent Republican executive and legislative control in 2017, conservative policy makers have already declared their desire to repeal the Affordable Care Act (ACA) and its Medicaid expansion, which has been responsible for approximately 12 million of the 20 million individuals who became newly insured as a result of the ACA. But proposals for fundamental reform of Medicaid are even more far-reaching in terms of their consequences for the other 60 million low-income children, parents, the elderly, and individuals with disabilities who rely on the program. Understanding the rationale for and likely effects of these proposals is critical for physicians and patients alike.
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Many Obamacare supporters claim the law has expanded health coverage to upwards of 20 million Americans, but new data shows that isn’t accurate.
As part of Congress’ continued push to repeal Obamacare, the House Budget Committee held a hearing this week titled “The Failures of Obamacare: Harmful Effects and Broken Promises.”
Heritage Foundation expert Ed Haislmaier was one of four expert witnesses who testified.
Haislmaier presented new data regarding gains in health coverage since the full implementation of Obamacare began in 2014.
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President Donald Trump’s administration made explicit this weekend its commitment to an old GOP strategy for managing Medicaid, the federal-state insurance plan that covers low-income people — turning control of the program to states and capping what the federal government spends on it each year.
It’s called “block granting.” Right now, Medicaid, which was expanded under the 2010 health reform to insure more people, covers almost 75 million adults and children. Because it is an entitlement, everyone who qualifies is guaranteed coverage and states and the federal government combine funds to cover the costs. Conservatives have long argued the program would be more efficient if states got a lump sum from the federal government and then managed the program as they saw fit. But others say that would mean less funding for the program —eventually translating into greater challenges in getting care for low-income people.
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Healthcare advocacy groups say a bill in the Missouri Senate that seeks to transform Medicaid into a block grant program would cut necessary funding for healthcare services for Missouri’s most vulnerable citizens. But Republican supporters say it would give the state more flexibility and help it control runaway spending.
The same debate is playing out on a national stage. GOP lawmakers, including President Donald Trump, have embraced Medicaid block grants as a solution to growing costs. As Medicaid reform looks more and more like a potential reality, states are beginning to question if it’s wise to forgo some federal funding in exchange for more control.
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As the 115th Congress convenes and President-elect Trump prepares to take office tomorrow, our nation faces incredible challenges and opportunities. On health care in particular, the stakes couldn’t be higher, nor the path forward more clear. As leaders working on state-based policy solutions across the country, we have seen the impact of Obamacare on our communities up close. That’s why we’ve produced a report, being released today, on the need to unwind the law’s disastrous expansion of Medicaid.
Given the focus on the disastrous launch of the law’s insurance exchanges in 2013, many people don’t know that most of Obamacare’s coverage gains have come not through those exchanges, but through its new expansion of Medicaid to able-bodied, working-age adults.
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Medicaid has grown in size in recent years, with ObamaCare extending coverage to millions of low-income people who hadn’t qualified before. But Republicans warn of the program’s growing costs and have pushed to provide that money to states in the form of block grants — an idea President-elect Donald Trump endorsed during the campaign.
Vice President-elect Mike Pence signaled in an interview with ABC this month that the incoming administration planned to keep Medicare as it is, while looking at ways to change Medicaid.
“I think President-elect Trump made it very clear in the course of the campaign that, as president, we’re going to keep our promises in Social Security and Medicare,” Pence told ABC. “With regard to Medicaid, though, I will tell you, there’s a real opportunity, there’s a real opportunity as we repeal and replace ObamaCare to do exactly what the president-elect also said on the campaign, and that is block granting Medicaid back to the states.”
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