Senate GOP Efforts to Soften Medicaid Cuts Could Have Little Effect

Sen­ate Re­pub­lic­ans are at­tempt­ing to soften the im­pact of the Medi­caid cuts in their nas­cent Obama­care-re­peal bill, both by chan­ging the de­tails of the meas­ure ap­proved by the House and by em­ploy­ing gentler lan­guage to de­scribe them.

Re­pub­lic­ans say they are eye­ing a mul­ti­year “glide path” that would phase out Medi­caid ex­pan­sion more gradu­ally. But, coupled with pro­posed caps on the pro­gram’s spend­ing, some ex­perts do not ex­pect the out­comes to be any less dra­coni­an than un­der the House pro­pos­al.

The GOP has been plagued with cri­ti­cism since the Con­gres­sion­al Budget Of­fice de­term­ined that 14 mil­lion few­er people would be en­rolled in Medi­caid un­der the House bill. Ad­di­tion­ally, CBO said spend­ing would be re­duced by $834 bil­lion.

From the start, some Sen­ate Re­pub­lic­ans were un­easy with the House plan for Medi­caid. Sen. Rob Port­man of Ohio, whose state ex­pan­ded, is push­ing for a sev­en-year phase-out pro­pos­al for states, and sev­er­al oth­er law­makers seemed open to hav­ing a slower phase-out.

Sen. Dav­id Per­due, however, is wary of a sev­en-year time frame. “I don’t sup­port a sev­en-year glide path. That’s not a glide path; that’s per­man­ency,” he said.

And some ex­perts at­test that a glide path would still pro­duce sim­il­ar out­comes to the House plan.

“You’re end­ing up with the same ex­act res­ult. You’re adding tens of mil­lions to the un­in­sured,” said Ed­win Park, vice pres­id­ent for health policy at the Cen­ter on Budget and Policy Pri­or­it­ies. Park also noted that some Medi­caid-ex­pan­sion states have trig­gers in their laws in which the ex­pan­sion auto­mat­ic­ally ends if the match­ing rate falls.

Pro­mot­ing a longer phase-out of the pro­gram’s ex­pan­sion could be more about mes­saging to con­stitu­ents than it is about res­ults, said Molly Reyn­olds, a fel­low in gov­ernance stud­ies at the Brook­ings In­sti­tu­tion.

However, Matt Salo, ex­ec­ut­ive dir­ect­or of the Na­tion­al As­so­ci­ation of Medi­caid Dir­ect­ors, does not ex­pect the CBO num­bers around Medi­caid would look the same in a Sen­ate bill, par­tic­u­larly be­cause mod­er­ates would likely not tol­er­ate the $834 bil­lion ex­pec­ted to be cut from the pro­gram un­der the House bill.

Salo said Re­pub­lic­ans will have to put more money in­to Medi­caid if they stretch the phase-out of the ex­pan­sion, and would likely have to put more money to­wards states that didn’t ex­pand. But in that case, the money wouldn’t ne­ces­sar­ily have to go to­ward Medi­caid, he sug­ges­ted, but rather to­ward oth­er pro­grams such as re­in­sur­ance or high-risk pools.

Re­du­cing cuts to the pro­gram would likely touch upon an­oth­er key is­sue—Obama­care’s taxes. “If they choose to re­duce the size of the Medi­caid cut, they have to find a way to pay for it in the bill,” said Reyn­olds. “How com­mit­ted are they to re­peal­ing all taxes? How flex­ible are they on the tax side of the bill?”

The growth rate for per-cap­ita caps, a key fea­ture of the Re­pub­lic­an plan for the pro­gram, has also driv­en a wedge between dif­fer­ent fac­tions of the party. The Amer­ic­an Health Care Act pro­poses to have the caps rise at a slower rate for Medi­caid pop­u­la­tions than is cur­rently pro­jec­ted for per-be­ne­fi­ciary spend­ing, ac­cord­ing to the CBPP. But Sen. Pat Toomey would like spend­ing for the pro­gram to be even lower.

Sen. Dean Heller, who is fa­cing a chal­len­ging reelec­tion next year, did not want to see spend­ing go be­low that of the House bill.

“Well, I just don’t want to do worse than what the House did, and there’s a push to bring it be­low the House,” the Nevada Re­pub­lic­an said. Heller ad­ded that he wanted to make sure his state’s gov­ernor could ac­cept some of the changes that would be in­cluded in the le­gis­la­tion.

“That’s one thing for me to sit back here and le­gis­late; it’s an­oth­er thing for the gov­ernor to have to run the pro­gram,” he said.

A Medi­caid ex­pert, who re­ques­ted an­onym­ity be­cause his or­gan­iz­a­tion has not taken an of­fi­cial stance on the Re­pub­lic­ans’ plans, said states are jus­ti­fi­ably con­cerned that the dis­cus­sions on Cap­it­ol Hill about re­form­ing the pro­gram aren’t as soph­ist­ic­ated as they need to be. He said that un­der a per-cap­ita cap, states would have to eval­u­ate all pop­u­la­tions to see if they can af­ford to keep them covered.

The ex­pert noted that, for the ex­pan­sion pop­u­la­tion, there are “two bites at the apple”: the fed­er­al match rate go­ing down and then the cal­cu­la­tion of the cap baseline and growth rates. CBPP’s Park said the per-cap­ita caps would in­centiv­ize states to freeze en­roll­ments rather quickly.