Medicaid Faces $880 Billion Cut Through 2026 in Republican Health Plan
A March 13, 2017, Center on Budget and Policy Priorities (CBPP) blog post reports that “CBO: 24 Million People Would Lose Coverage Under House Republican Health Plan.”
The Congressional Budget Office (CBO) release estimates the potential devastating effects of the House Republican health plan to repeal much of the Affordable Care Act (ACA.)
The repeal would result in $880 billion in federal Medicaid cuts over the next ten years. This plan eventually rolls back all of the health coverage gains under the ACA.
The plan has been approved by two House committees. It effectively ends the ACA’s Medicaid expansion starting in 2020 and converts all of Medicaid to a per capita cap.
It repeals the ACA’s marketplace tax credits and subsidies, substitutes a tax credit in 2020, and immediately ends the ACA’s individual and employer mandates to buy and provide health coverage.
The plan retains most of the ACA’s market reforms and consumer protections. The plan includes protections for people with pre-existing conditions. It allows individual-market insurers to charge 30 percent higher premiums to people who have not maintained continuous coverage.
This gives ineffective alternative to the individual mandate. Insurers could also charge premiums as much as five times higher for older people than younger people.
The New York Times reports, “The much-anticipated judgment by Capitol Hill’s official scorekeeper did not back up President Trump’s promise of providing health care for everyone and was likely to fuel the concerns of moderate Republicans. Next year, it said, the number of uninsured Americans would be 14 million higher than expected under current law.”
Among CBO’s key findings:
- By 2026, the number of uninsured would be 86% percent higher than under current law.
- This means that, by 2026, all of the historic coverage gains expected under the ACA would disappear and the uninsured rate among the non-elderly would be at or above its 2010 level.
- The report states, “Some states would discontinue their expansion of eligibility” for Medicaid and federal spending per beneficiary would be capped.
- Federal Medicaid spending would be cut by 17.6 percent over the next ten years, relative to current law, due to the reduction in federal funding for the Medicaid expansion and conversion of Medicaid to a per capita cap.
- By 2026, the annual cut in federal spending would rise to $155 billion relative to current law. As a result, the number of Medicaid beneficiaries would fall by 14 million in 2026.
“Tom Price, the secretary of health and human services, suggested the report offered an incomplete picture because it did not take into account regulatory steps he intends to take, as well as other legislation that Republicans plan as part of their multi-step strategy to repeal and replace the health law.
‘We disagree strenuously with the report that was put out,’ he said at the White House.”
The CBO report could harm the Trump administration’s work to get the plan passed by Congress and “Explain why their legislation would improve the country’s health care system. And that could make the bill’s fate in the more narrowly divided Senate much more tenuous.”