Today’s Managing Health Care Costs Number is 50
We might have thought that the Republicans would give up on repealing the Affordable Care Act (ACA) - since they have come up with no alternative that would not lead to tens of millions more uninsured. Many of their proposals would paradoxically increase the cost of health care – whether through increasing premium subsidy cost by eliminating subsidies that decrease out of pocket costs for the poor, by removing minimum medical loss ratios, or removing prohibitions on physician ownership of ambulatory facilities.
But Graham-Cassidyis here – and it’s been blessed by “moderates” like Dean Heller. John McCain and Lindsey Graham are best friends -- so he might just vote for this bill. and Bill Cassidy is a physician from Louisiana, a state that just over 400,000 new residents with its Medicaid expansion, and decreased the uninsured rate from 21.7% to 12.7%.
The bill would make massive cuts in Medicaid –much like the other plans that the CBO projected would lead to loss of insurance by more than 20 million Americans. It would change funding for both Medicaid and exchange subsidies to be a block grant to states – and redistribute the smaller pot of money from states that had expanded Medicaid to those which did not. It would allow states to waive the essential benefits and the insurance reforms of the ACA –so goodbye to protections for the sick. It would allow catastrophic health plans and mini-med health plans, prohibit any tax credits to any plan that covered abortions, and explicitly allow states to impose work requirements for Medicaid beneficiaries. The individual mandate would lapse- making the insured pool sicker and therefore increasing health care premiums.
The R’s have less than two weeks to get a Congressional Budget Office (CBO) score and an approval from the Senate Parliamentarian to pass this egregious bill under the “reconciliation” procedure that requires only 50 votes (with VP Mike Pence as a tiebreaker). But they can do it – and the pressure on that 50th Republican Senator to not be the one who prevented this travesty will be massive.
Some argue that state based programs are better than a federal program because states are able to be more nimble and innovative, and what’s good for Massachusetts is simply not what is good for Mississippi. Here are four reasons why moving Medicaid to state block grants is a terrible public policy idea.
1. Medicaid spending spikes during economic recessions – and the feds can run a deficit but the states cannot. So block granting this program (even if it were not woefully underfunded) doesn’t make economic sense.
2. Nineteen states have not expanded Medicaid given the option with almost no state contribution– proving that their politicians are simply not committed to addressing the problem of uninsurance. In Alabama a family of four cannot qualify for Medicaid unless their income is less than $4000 a year. I’m not sure what makes us think that the state would be any more likely to use these new funds to bolster care for the poor.
3. We want more labor flexibility – especially in an environment with low unemployment. Medicaid eligibility rules changing at the state line doesn’t help this.
4. States are not especially adept at technology - and many states (including well-meaning blue states) wasted scads of money trying to set up their exchanges only to throw their hands in the air and opt for joining the federal exchange. Technology will be key to sending all possible dollars toward health care –and not toward administrative costs.
Many governors would like a big block grant. Money is fungible –and they could use that block grant to supplant other funds the state previously spent on public health or health care and free up those dollars to go to other priorities. We would likely see regressive tax cuts and giveaways to well-connected hospitals.
I’m hopeful that Graham-Cassidy is here too late to upend the health insurance market. But I’m not sure. And I’m worried.
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