Health care:
Tweak to bill could hit California harder.
House Republicans’ proposed changes to the American Health Care Act — the GOP’s plan to replace the Affordable Care Act — could reduce federal funding to Medi-Cal, California’s insurance program for the poor, even more dramatically than the original bill sought to do, health experts said.
The amendments, released by House Republican leaders Monday night, keep the core elements of the original bill but propose two notable changes to the way states can administer Medicaid.
They also include language that gives the Senate, when it considers the bill in the coming weeks, an opening to change the way tax credits are calculated to give people in their 50s and 60s additional financial assistance to buy health insurance — though experts say the assistance would still be smaller than what they currently receive under the Affordable Care Act.
On the Medicaid side, the new changes would allow states to impose a work requirement for Medicaid beneficiaries — an option that California is unlikely to take. In California, 81 percent of Medi-Cal beneficiaries who are non-elderly adults and not disabled are in a family where at least one person works; 61 percent work themselves.
A spokeswoman for the Department of Health Care Services, which administers Medi-Cal, said the agency “cannot speculate as to any potential changes to the Medicaid program that may occur under proposed federal legislation.”
But Tim Jost, a health law professor at Washington & Lee University, said he would be surprised if California headed down this path, which some Republican-led states have attempted in recent years, only to be denied by the Obama administration. “With the current politics in California, I would be surprised if it were one of the first states trying to impose a work requirement,” Jost said.
In California, about 1 in 3 residents, roughly 14 million people, are on Medi-Cal. About 4 million of them were added over the past few years under the ACA’s Medicaid expansion, which California officials moved more aggressively than most states to enact.
The new Republican amendments would also give states the option of choosing between two types of Medicaid federal funding starting in 2020, though both options would result in a significant reduction of federal dollars to Medi-Cal.
The original bill sought to change the way the federal government finances Medicaid by switching from the current federal matching system to a per capita cap, starting in 2020, that is based on enrollment. The new proposal would allow states to choose a block grant instead, which would translate to less money over time than the per capita cap, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
On the individual market side, the new proposals would lower the tax threshold for medical expense deductions, from 7.5 percent to 5.8 percent, with the apparent aim of allowing the Senate to provide more generous tax credits for people in their 50s and 60s. The Congressional Budget Office and other analysts have found that lower-income Americans in their 50s and 60s would be hurt most by the GOP plan, as the bill would provide smaller tax credits to buy plans while at the same time allowing insurers to charge older consumers five time more than what they charge younger consumers.
“This change provides the Senate flexibility to potentially enhance the tax credit for those ages 50 to 64 who may need additional assistance,” the proposal said.