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New Senate Bill: The More Things Change, the More Medicaid Cuts Remain the Same

It’s a new day, with a new Senate bill.

And the same story.

The first version of a bill to repeal the Affordable Care Act (ACA) was introduced early this year, and ever since that day, we at the Colorado Health Institute (CHI) have encouraged people to pay special attention to Medicaid. That’s still the case for the latest version of the bill that Senate Majority Leader Mitch McConnell released today.

The House and Senate versions cut funding for Medicaid in different ways, but with mostly the same result: 600,000 or more Coloradans would lose their coverage by 2030, with $14 billion to $15 billion in lost federal funding for Colorado.

My colleagues Ian Pelto and Brian Clark have put together a matrix to show the differences between the ACA, the House bill and the Senate bill. The latest version will be out later today, and it will show this morning’s changes to the Senate. Bill. Check it out here.

This morning’s latest draft of the Senate’s Better Care Reconciliation Act does not change our projections. (You can read more about our Medicaid analysis here.) All versions of the bill essentially end the ACA’s Medicaid expansion and replace traditional Medicaid funding with block grants or per capita caps, where federal funding is provided for a base year and a pre-determined inflation rate, regardless of the actual costs of coverage.

The latest bill does address one criticism of the per capita caps approach. Originally, the bill would have made no exceptions for a public health emergency, such as an outbreak of Zika. This version does allow for added emergency funding.

And CHI’s Emily Johnson is working to model a new provision that appears to let states keep their ACA Medicaid expansion if they opt for block grant funding. This small section of the bill hasn’t received much notice today, but we will be keeping an eye on it because it might be an option for Colorado if the bill passes.

Elsewhere, the new bill is mostly the same as the original Senate bill, with a few notable exceptions.

There are funding changes:

  • $45 billion to treat substance abuse, including the opioid crisis.
  • Another $70 billion for grants to stabilize state insurance markets.
  • Two ACA taxes on high-earners — a capital gains tax and a Medicare tax — would be retained in order to pay for spending under the Senate bill.

And there’s a big new change to the private insurance market based on a plan by Republican Sens. Ted Cruz and Mike Lee. It would allow health insurers to offer bare-bones plans to healthy people, while shifting sicker people into high-risk pools. The amendment also would allow insurers to ignore the best-known protections of the ACA: the ban on discriminating against patients with pre-existing conditions, the 10 essential health benefits, and limits of out-of-pocket costs.

CHI has not modeled this new amendment, but national analysts expect it would drive up the cost of coverage for older people and those in less-than-perfect health.

No one expects today’s bill to be the final version. If Republican leaders can secure enough votes to begin debate next week, then dozens of amendments could be offered.

However, I’ll make a bold prediction. It looks like we are closer to the end of this process than the beginning.

Senate leaders bought themselves a couple extra weeks by delaying their August recess, but Congress has other important topics to tackle. It can’t start working on a Republican tax reform plan until the health care bill is passed or defeated. It has a budget to pass and other important fiscal issues to tackle. So next week will be crucial moment in the debate over the future of U.S. health policy.

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