Re­vised Se­nate bill does lit­tle to quell con­cerns about Med­i­caid cuts

Modern Healthcare - - NEWS - By Mara Lee

Al­though the re­vised ver­sion of the Bet­ter Care Rec­on­cil­i­a­tion Act would add tens of mil­lions of dol­lars in fund­ing to shore up the in­di­vid­ual mar­ket, the fact that it still has ma­jor cuts hit­ting nearly ev­ery part of the Med­i­caid pop­u­la­tion puts its pas­sage in doubt. A half-dozen Repub­li­cans in Med­i­caid ex­pan­sion states have com­plained about the pro­posed cuts, and lead­er­ship can af­ford to lose only two votes.

“I op­posed the pre­vi­ous draft be­cause it did not en­sure ac­cess to af­ford­able health care in West Vir­ginia, did not do enough to com­bat the opi­oid epi­demic that is dev­as­tat­ing my state, cut tra­di­tional Med­i­caid too deeply and harmed ru­ral health­care providers,” Sen. Shel­ley Moore Capito (R-W.Va) said in a state­ment. “I look for­ward to re­view­ing the re­vised Se­nate health­care leg­is­la­tion and forth­com­ing (Con­gres­sional Bud­get Of­fice) re­port to de­ter­mine the im­pact on West Vir­gini­ans but con­tinue to have se­ri­ous con­cerns about the Med­i­caid pro­vi­sions.”

The bill aims to cre­ate a per-capita cap sys­tem for Med­i­caid, de­signed to re­duce fed­eral spend­ing. Dif­fer­ent caps would be set for dif­fer­ent pop­u­la­tions through 2024, with some fed­eral spend­ing match­ing the rate of med­i­cal in­fla­tion, and some pegged at med­i­cal in­fla­tion plus one per­cent­age point. In 2025, the cap would be pegged to stan­dard in­fla­tion, which is sub­stan­tially lower than med­i­cal in­fla­tion. While some of the his­toric spend- ing pat­terns are in line with or slightly be­low the first phase of caps, no group of Med­i­caid pa­tients’ costs grow as slowly as stan­dard in­fla­tion.

The bill would phase out Med­i­caid ex­pan­sion by 2023, the same time­line as the orig­i­nal ver­sion.

Re­act­ing to the re­vised leg­is­la­tion, Amer­ica’s Es­sen­tial Hos­pi­tals Pres­i­dent and CEO Dr. Bruce Siegel said in a state­ment that it “leaves un­touched the most de­struc­tive pro­vi­sions of the orig­i­nal bill: those that would gut the Med­i­caid pro­gram and strip af­ford­able cov­er­age from mil­lions of low-in­come work­ing Amer­i­cans.”

Also un­der the bill, hos­pi­tals no longer could make pre­sump­tive Med­i­caid el­i­gi­bil­ity de­ter­mi­na­tions af­ter 2020. It would, how- ever, make dis­pro­por­tion­ate share hos­pi­tal pay­ments in non-ex­pan­sion states more gen­er­ous. Th­ese states would be spared from DSH re­duc­tions and states that are be­low-av­er­age per capita in DSH pay­ments would rise to the na­tional av­er­age.

Siegel dis­missed this, say­ing it “pales in com­par­i­son to the hun­dreds of bil­lions of dol­lars this bill would drain from Med­i­caid by end­ing ex­pan­sion and im­pos­ing spend­ing caps.”

Sen. John McCain (R-Ariz.) was dis­ap­pointed the re­vi­sion keeps the same phase­out time­line for the Med­i­caid ex­pan­sion and said that if the bill gets to the floor, he would of­fer amend­ments to ad­dress the is­sue.

Ma­jor­ity Leader Mitch Mc­Connell (R-Ky.) and other bill drafters added tens of bil­lions in fund­ing for high-risk pools or rein­sur­ance, as Repub­li­cans have heard voter anger about the cost of in­di­vid­ual plans.

The bill would keep taxes on the wealthy and in­surer CEO com­pen­sa­tion, which are pro­jected to bring in $232 bil­lion over a decade. It also would add more than $130 bil­lion in spend­ing, pri­mar­ily for states to use for high­risk pools or rein­sur­ance pro­grams. There is $182 bil­lion in the bill for that kind of aid.

Of the pool of money, Alaska is guar­an­teed to re­ceive at least $150 mil­lion in 2018 and $230 mil­lion in 2019. Alaska has the high­est in­sur­ance costs in the coun­try; the state could lose the ex­tra fed­eral fund­ing if their premi­ums fall sig­nif­i­cantly.

States would have to start match­ing

Ma­jor­ity Leader Mitch Mc­Connell and other bill drafters added tens of bil­lions in fund­ing for high-risk pools and rein­sur­ance.

the funds in 2022, at 7%, and that match would climb by seven per­cent­age points each year un­til reach­ing 35% in 2026.

The money is not lim­ited to high-risk pool sub­si­dies or rein­sur­ance. The bill also would al­low states to spend the money for cost-shar­ing, which low­ers co­pays and de­ductibles for the peo­ple with the low­est in­comes. That fed­eral fund­ing is paid only through 2020. Cost-shar­ing fund­ing, which has been one of the most con­stant re­quests by the in­sur­ance in­dus­try, was $7 bil­lion this year. In 2016, rein­sur­ance pay­ments to­taled $4 bil­lion.

“Rein­sur­ance works,” said Caro­line Pear­son, se­nior vice pres­i­dent at con­sul­tancy Avalere Health. But she said Avalere an­a­lysts don’t be­lieve this pool of money could coun­ter­act the desta­bi­liz­ing ef­fects of other leg­isla­tive pro­pos­als, in­clud­ing re­duc­ing sub­sidy el­i­gi­bil­ity, end­ing cost-shar­ing and end­ing the in­di­vid­ual man­date.

The re­vised bill would add $70 bil­lion to sta­bi­lize the in­sur­ance mar­ket­place in states where in­sur­ers sell plans that wouldn’t fol­low Af­ford­able Care Act reg­u­la­tions, such as not dis­crim­i­nat­ing in pric­ing by health sta­tus, sell­ing to ev­ery­one and cov­er­ing es­sen­tial health ben­e­fits. Those states would likely suf­fer from ad­verse se­lec­tion if non­com­pli­ant plans are far cheaper than those on the ex­change.

An­other $2 bil­lion would help those state gov­ern­ments cover the cost of reg­u­lat­ing in­sur­ance.


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