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Deep Medicaid Cuts Drive Backlash to House Health Care Bill

The House Republican health care bill’s cuts to Medicaid, often ignored in the drama over its last-minute changes on pre-existing conditions, are fast
Image: Democratic Senators Speak Out Against Trump's Health Care Plan
Protesters listen to Sen. Bernie Sanders (I-VT) speak during a Stop 'Trumpcare' rally May 4, 2017 in front of the Capitol in Washington.Alex Wong / Getty Images

The House Republican health care bill’s massive cuts to Medicaid, often skimmed over in the last-minute drama over pre-existing conditions, are fast emerging as a critical source of opposition in the Senate.

President Donald Trump said in his speech announcing his 2016 campaign that he would not cut Medicaid and bragged on Twitter that he was the first candidate to do so. He didn't keep that promise: The bill’s Medicaid cuts, which the Congressional Budget Office estimates at $839 billion over 10 years, are arguably its most sweeping change. They’re also critical to financing the bill’s tax cuts for high-income Americans and medical industries, which require the savings to offset the loss in revenue.

Leading patient advocacy groups are warning the combination of less spending and a restructuring of the program will threaten coverage for millions of vulnerable Americans, including seniors, people with disabilities, and children. The top medical industry groups representing doctors, hospitals, and insurers are raising similar concerns, along with key Republican senators whose support will be needed to pass a bill.

Cuts could force tough choices

About 73 million people receive coverage through Medicaid. The program covers low-income Americans and was expanded under the Affordable Care Act. All but 19 states have accepted the additional federal funding, which covers people with incomes up to 138% of the federal poverty line.

The House bill would gradually do away with the expansion, but would go much further than simply rolling back Obamacare's changes. It would also transform Medicaid from a program that provides guaranteed matching funds to states to one that provides a fixed per-capita amount for every recipient or a block grant to cover total spending. The Congressional Budget Office has estimated these changes will leave 14 million fewer people covered by the program after a decade.

Conservative supporters argue the caps on spending will encourage states to find more efficient ways to deliver care. But the scale of cuts will inevitably force tough choices: With fewer funds available states could be forced to reduce eligibility, scale back payments to providers, or provide fewer benefits.

“You could have tens of millions of people removed from the program or entire classes of services eliminated from the program or both,” Sara Rosenbaum, a professor of health law and policy at George Washington University, told NBC News.

Medicaid serves more functions than is often realized, and affected groups are rushing to publicize them now that the health care bill is back in play.

AARP is concerned the cuts could jeopardize approximately 10 million people who are eligible for both Medicare and Medicaid. Medicaid notably covers long-term care services, including home aides and nursing facilities, that Medicare does not. Thirty-six percent of total Medicaid spending goes to patients who also have Medicare, according to the Kaiser Family Foundation.

“The impact of such a huge loss of federal Medicaid funds on people with disabilities and poor seniors will be devastating,” Lynda Flowers, a Senior Strategic Policy Adviser with the AARP Public Policy Institute, wrote in a post for the group’s website.

The disability community has responded fiercely as well, highlighting potential cuts to special education programs at schools and to services that help Medicaid recipients — about 10 million of whom qualify due to disability — live and work independently. The bill, National Disability Rights Network executive Director Curt Decker warned in a statement, “will compel States to ration health care for children, including important mental health services.”

Unexpected obstacles

While per-capita Medicaid spending rises with enrollment under the House plan, health experts warn it could create difficulties for states if they have to respond to a health crisis or account for new treatments that raise the average costs per person.

One example is the recent opioid epidemic. Sen. Rob Portman (R-OH), whose state has been among the hardest hit, said Thursday in a statement that he opposed the House’s bill because he feared its Medicaid rollback would affect treatment for drug abuse.

Sens. Shelley Moore-Capito (R-WV), Dean Heller (R-NV), Susan Collins (R-ME), Cory Gardner (R-CO), and Lisa Murkowski (R-AK), among others, also have raised concerns about the impact on their constituents and their state's budgets.

Supporters of the House plan argue that the bill smooths the transition by grandfathering people who received Medicaid through the expansion until they leave the program. “Nobody on Medicaid is going to be taken away,” House Majority Leader Kevin McCarthy said on CNN Thursday. But Medicaid has a high turnover rate, meaning their eligibility is likely to lapse quickly.

Conservative health experts supportive of transforming Medicaid into a per-capita or block grant program argue these recipients should be on private insurance instead. But there’s concern even among some advocates of this approach that the bill’s other provisions, namely its steep reductions in subsidies to help older low-income customers afford insurance, will leave them without any options.

“By repealing Obamacare’s Medicaid expansion and replacing it with a flat tax credit that doesn’t provide enough assistance to the working poor, millions with incomes above the poverty line are going to lose their insurance...” Avik Roy, who advised Mitt Romney’s presidential campaign, wrote in a column for Forbes.