What Does House ACA Repeal Proposal Mean for Children and

June 18, 2018 – 03:25 pm
Meaning of Family

As the House of Representatives moves with rapid speed to pass legislation to repeal the Affordable Care Act, the public can finally get a glimpse of their plan – though the public still needs a lot more information about the proposal and the “intended” and “unintended” consequences it would have for children and families. The bill text came to light last night – but there is still no score from the Congressional Budget Office (CBO). That may sound like a wonky, inside-the-beltway thing to be worried about, but the reality is that the CBO score would help us all get answers to fundamental questions about how federal funding for Medicaid and insurance coverage levels would change.

A CBO score is especially critical for a budget reconciliation bill like this because the purported purpose of fast-tracking these measures like this is to reduce federal spending. CBO is like the referee in a game that will make the non-biased judgement call on whether the bill achieves that goal or not. But putting aside for a moment what we don’t know about the implications of the House repeal bill, there are a few tidbits that we do know about how children and families will be affected:

The House bill caps Medicaid, jeopardizing coverage for children, families, and the entire Medicaid population.

In our view, many news articles on this topic bury the lead. The important point that is often missed is the fact that the bill being considered by the House Energy and Commerce Committee tomorrow would cap the entire Medicaid program. As we expected, Congress intends to radically change the financing structure of the Medicaid program while they are in the neighborhood of repealing and replacing the ACA. Medicaid’s financing structure has done a good job of helping state Medicaid programs serve children and families, individuals with disabilities, seniors in long-term care, and others for over 50 years.

But under the House bill, state spending will be subject to an aggregate federal cap, starting in 2020. If state spending exceeds the cap, future federal payments will be reduced. Each state’s aggregate cap is the sum total of the caps for each category, which are set based on a series of complicated calculations that basically multiply FY 2016 spending trended forward to FY 2020 and actual enrollment in FY 2020. The categories are: (1) seniors, (2) people with disabilities, (3) children, (4) expansion adults, and (5) other adults (in non-expansion states, the fourth group does not apply).

The bill bases spending on FY 2016 and inflates that going forward with the medical component of the consumer price index (CPI-M). An analysis just released by the Center on Budget and Policy Priorities finds that the projected Medicaid cuts from the cap and the limits on the Medicaid expansion (more on that below) would result in $370 billion in cuts over a ten-year period. The Center estimates that $116 billion of these cuts would come from the non-expansion side of Medicaid – i.e. children, low-income parents, seniors, pregnant women, and people with disabilities. These costs would be shifted to states which would have to raise taxes, cut other spending, or cut back on coverage and care for Medicaid beneficiaries.

What is particularly troubling about the cap is that it essentially sets up Medicaid as a piggy bank for the future when Congress needs savings for other things (think tax cuts for the wealthy, infrastructure spending, defense spending, etc.) because they can freeze the growth rate or lower the cap very easily once they have radically restructured Medicaid’s financing structure. In fact, even in the process of drafting the current bill, we have heard many rumors of different inflationary factors being applied to the Medicaid cap that have gone up and down depending on, one assumes, the political imperatives of the moment. The cap could even change before the floor vote – who knows?

The House bill forces the Medicaid expansion to wither on the vine, leaving many parents without coverage and impacting kids’ coverage too.

Under the House bill, the Medicaid expansion is not repealed outright, but is left to die. States can continue to draw down the expansion FMAP through December 31, 2019, but as of January 1, 2020, things get much more difficult. From January 1, 2020 onward, states may only draw down the expansion FMAP for those enrollees who were continuously covered prior to 2020 – meaning no gaps in coverage of more than one month each year. For enrollees joining the program in 2020 and enrollees who have experienced a gap in coverage between 2017 and 2020, the state may only draw down the regular FMAP.

Based on past experience and the high levels of small but meaningful fluctuations in income, we would expect to see considerable churn among expansion enrollees and, as a result, fewer and fewer people eligible for the enhanced match over time. The likelihood of people churning on and off coverage is increased by a different provision of the bill – section 116 which requires states to conduct eligibility redeterminations every 6 months for the expansion population rather than every year. Even people who continue to be eligible will fall through the cracks as the paperwork burden increases.

Having less federal financial support hastens the likelihood that states would seek to limit enrollment and the expansion would wither away. A good example can be found in Arizona’s CHIP program, which we wrote about last year, where a freeze on CHIP enrollment led to precipitous declines in enrollment that were impossible to makeup even after CHIP re-opened.

As we have written about many times, the Medicaid expansion is very important to children and families because many parents get their coverage this way and children are more likely to be covered and have their health needs met if their parents are covered too. Children also benefit from having healthier parents and the whole family must be covered to ensure that they are not exposed to the financial insecurity that arises when one member of a family is uninsured.

The House bill would allow states to undo cost-sharing and benefit protections for school-aged children between 100-133 percent FPL.

This provision of the House bill is directly targeted at kids. It would rollback the gains made under the ACA provision known as the “stairstep”, which aligned coverage for more than half a million children in 22 states by requiring all children in families earning between 100% and 133% of the Federal Poverty Level to be covered by Medicaid rather than just those under age six. As the factsheet we published after this law took effect indicates, this change in law removed the financial barrier to coverage of premiums for children in 8 states and children in 13 states no longer faced co-pays for health care services. Plus, children in all 22 states gained EPSDT – Medicaid’s child-centered benefit package. EPSDT stands for “Early and Periodic Screening, Diagnostic and Treatment” and guarantees that children receive all the services, including vision, hearing, and dental care, that are necessary for their growth and healthy development.

Source: ccf.georgetown.edu

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