Senate GOP Efforts to Soften Medicaid Cuts Could Have Little Effect

Republicans are looking at phasing out the Medicaid expansion more slowly, but the end results may look the same as in the House.

Sen. Rob Portman, with Vice President Mike Pence in Columbus, Ohio in April
AP Photo/John Minchillo
Erin Durkin
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Erin Durkin
June 12, 2017, 8 p.m.

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.

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