Congressional Medicaid Proposals Would Mean Big Cuts to Medicaid, Higher Costs for Texas

///Congressional Medicaid Proposals Would Mean Big Cuts to Medicaid, Higher Costs for Texas

As CPPP’s Stacey Pogue recently explained, U.S. House leaders are expected to file legislation within days that will begin to repeal and “replace” the Affordable Care Act (“ACA” or Obamacare). Based on an outline made public in February, the bill is expected to result in fewer people being able to afford insurance—especially low- and moderate-income individuals—and in allowing insurance plans to cover fewer benefits.

Beyond cutting affordability and consumer protections for private health insurance coverage, the U.S. House outline also proposed a radical restructuring of Medicaid. Based on the outline, a leaked bill draft that was analyzed by many experts, and the actual bills filed and officially “scored” last summer (2016), last summer’s House bill did not just “bend the cost curve”—like dropping the growth in per-enrollee cost from six percent to three percent a year—but actually cut federal Medicaid funds to Texas below current levels by as much as 25  percent. So, the very first question we will ask when an actual bill is finally filed will be, “does it cut Texas Medicaid funds below current levels, which would force cuts to eligibility, benefits, or provider pay? And, by how much?”

Another critical point is that last summer’s bill would have cut Texas Medicaid by roughly $4.8 billion (20 percent of federal Medicaid dollars to Texas in 2016) in the second year of that law, regardless of whether Texas chose a Block Grant or a Per Capita Cap (also known as per beneficiary allotment). In other words, no matter what went into the complex formula for a state Medicaid block grant or per capita cap, Congress still planned to cut Medicaid funding to all the states below the base year! There is a big difference between “bending the curve” and this enormous cost shift from the federal budget to the state.

To give you a frame of reference, a $4.8 billion cut in federal Medicaid funds would be 48 times larger than the $150 million state dollar 2015 Medicaid Pediatric Therapy Cuts, and four to five times the size of even the massive 2003 Medicaid cuts (the $500 million federal funds annually then was just under 5% of total federal Medicaid funding for 2004).

Texas has many additional worries in a federal Medicaid cut-back, including whether we can keep our 1115 waiver dollars and other funds for hospitals; whether we will be locked in forever to physician and other health professional fees that have not had regular updates for over 20 years; whether we will forfeit an estimated $6 to $8 billion a year in Medicaid Expansion funding that 31 other states have received; and whether we can ever get federal dollars for our remaining uninsured or for over 200,000 Texans with disabilities on waiting lists for community care.

For a full check-list of all the issues and concerns for Texas Medicaid, see this new CPPP guide to understanding Medicaid Block Grant and Per Capita Cap proposals  and how they could impact (and damage) Texans’ access to health care. Then follow along with our CPPP team as we analysis the next Congressional proposals as they become official. Then we can all work together to make sure all our elected officials in Austin and Washington know exactly what is at stake for Texas.

Anne Dunkelberg oversees health care policy for CPPP. She focuses on policy and budget issues related to health care access and immigrants’ access to public benefits. She joined the Center in 1994 from the State Medicaid Director’s Office at the Texas Health and Human Services Commission. Anne is a founding member of the statewide Children’s Health Coverage Coalition (formerly the Texas CHIP Coalition) and the Cover Texas Now Coalition. She has been recognized by Families USA as an outstanding Consumer Health Advocate and by the LBJ School of Public Affairs Alumni Association as a Distinguished Public Servant. She was the primary author of the first edition of Texas Medicaid in Perspective (“the Pink Book”) and serves on the Texas Medicaid Managed Care Statewide advisory committee and the Texas Healthcare Transformation Waiver Executive Waiver Committee. Anne is a native Texan, and received her B.A. from the University of Texas at Austin, and her M.P.A. from the LBJ School of Public Affairs at the University of Texas at Austin.

1 Comment

  • Thank you so much for making it clear just what US House proposals would mean to the most vulnerable people in Texas. I just read Senator Cruz’ March 2nd letter (t to constituents in which he quoted a Kaiser study of employer sponsored plans ( Senator Cruz points out that premiums for families have risen dramatically since 2008. But what Senator Cruz doesn’t point out (from the same study) is that worker contributions to employer sponsored plans rose 107% for families between 2000 and 2008 while only rising 57% from 2008 to 2016. This shows that the ACA has truly slowed increases in run-away health care costs in America. It didn’t fix the problem but it made significant improvements. Senator Cruz also says that people are paying more for less with the ACA. They are certainly paying more, but they are paying more for more: gone are the plans with low premiums and no coverage; gone are lifetime limits. People can’t be denied coverage or suffer a waiting period for pre-existing conditions. In states where Medicaid was expanded, families with low incomes without employer-sponsored plans can get affordable coverage. The ACA is no disaster. It has not broken the US healthcare system. The ACA is not perfect and needs the work that every new social program needs. But health savings accounts, selling insurance across state lines, limited block grants, catastrophic plans that do not provide preventive care and care for chronic illnesses, and repealing the entire ACA will not expand coverage to all US citizens. We need to face the facts about the ACA and our health care system and develop a robust plan that supports our economy by making us all healthier and takes away the fear of what will happen to us if we get sick.

    Flora Brewer 04.03.2017

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