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Vorys Health Care Advisors

House Republican health plan would shift estimated $560B in Medicaid costs to states, impact all Medicaid enrollees

Posted in Access, Affordable Care Act, Behavioral Health, Health Care Reform, Medicaid

The House Republican plan to reform Medicaid projects federal savings of more than $500 billion dollars over 10 years, and the Center on Budget and Policy Priorities, a nonpartisan research and policy institute, estimates this plan would significantly shift Medicaid costs directly to states, “effectively ending the Affordable Care Act’s (ACA) Medicaid expansion for 11 million people while also harming tens of millions of additional seniors, people with disabilities, and children and parents who rely on Medicaid today.”

It is reasonable to argue that a 90% federal match for the expansion population is too much of a federal contribution to be sustained for the long run and states need to have ‘more skin in the game’. However, the effect of the House proposal would be a massive cost shift to states for the entire Medicaid program, guaranteeing that consumers’ access to care will suffer.

There are two Ohioans worth mentioning who will be effected by this cost shift. First, there is Dave. He’s about 48 years old and has a serious addiction. He is one of the 700,000 Ohioans who received coverage through Ohio’s Medicaid expansion; finally able to get treatment for his addiction.  His physical health has improved and he’s been able to work more steadily, but recovering from his addiction will take some time. He’s on the path to recovery. Ohio’s assessment of the expansion shows there are many Ohioans like Dave – people who were uninsured and gained access to health care that not only improved their physical and mental well being, but also made it easier for them to work and seek work and to improve their personal financial situations. Dave may not continue to have Medicaid coverage if funding for the Medicaid expansion populations is decreased and eventually eliminated.

Second, there is Molly. She is 33, has Down’s Syndrome, and receives a Medicaid home and community based waiver that allows her to share a house, work her job at the coffee shop, and enjoy her life in the community. She is one of the roughly 90,000 Ohioans who are elderly and/or disabled who receive home and community services, representing a small number of people enrolled in the Medicaid program, but accounting for a high proportion of overall Medicaid costs. Molly and other non-expansion individuals are not included in the House’s proposed cuts to Medicaid expansion, but will still be affected by the proposal’s shift in how the entire Medicaid program would be funded. The Center on Budget and Policy Priorities analysis estimates that overall, the house draft bill “would cut federal spending for the Medicaid program by an additional $280 billion over the next decade” on top of the proposed cuts to eliminate Medicaid expansion. These cuts would occur because of the plan’s intention to move Medicaid away from an entitlement program and into a per-capita cap system, which would account for neither the costs for community services (like those being used by Molly) rising at more than the rate of inflation, nor the cost of other significant health events Molly and Medicaid-enrolled individuals may encounter as they grow older.

Let’s not lose sight of the impact on Dave and Molly as the debate in Congress continues.

See the full analysis at the Center on Budget and Polity Priorities Blog.