Medicaid cuts advance

The reconciliation bill and the Medicaid cuts it proposes continue to move through Congress. Here’s an update on where things stand…

The proposals: The House Energy and Commerce Committee released the text of the bill last week. They opted against some of the most dramatic changes they had been considering (e.g., per capita caps, decreasing the federal match) but are still pursuing others, including:

• Work requirements: The bill would require every state to implement “community engagement requirements.” They would require 80 hours per month of work, education, or community service for “able-bodied” adults aged 19-64 without dependents. There would be an exception for those who are “medically frail,” including those “who have a chronic substance use disorder” (but, this will be onerous to prove).
• More eligibility checks: The bill would require eligibility checks at least twice a year (eligibility checks are currently limited to once per year).
• Cost-sharing requirements: The bill would charge Medicaid beneficiaries co-pays of up to $35 per service, up to 5% of an individual’s income (there are currently no cost-sharing requirements in Medicaid).
• Limiting states’ use of provider taxes: States tax hospitals and other providers as a way of increasing the amount of federal matching funds they receive. Some consider this a gimmick, but the taxes have become an established way for states to pay their share of Medicaid costs. The bill would freeze state provider taxes at their current rates and prohibit states from establishing new taxes.
• Reduction in funding for states that use their own funds to provide coverage for undocumented individuals: The bill would lower the federal share of payments to states that have expanded Medicaid if the state allows undocumented immigrants to get Medicaid coverage.
• ACA changes: Beyond Medicaid, the bill would also make changes to the Affordable Care Act and marketplace plans, making it more challenging for people to enroll in coverage.

The impact: These proposals all make it harder for people to maintain coverage, even if they are eligible, and to afford care.

• The Congressional Budget Office estimates that the Medicaid portions of the bill would lead to 10.3 million people losing coverage under Medicaid and 7.6 million people going uninsured.
• Most Medicaid beneficiaries are already working, but it is expected that people will still lose coverage because of onerous documentation requirements. Meanwhile, work requirements do not increase employment and are extremely costly to implement.
• The proposed cuts would be particularly harmful to people with addiction. Medicaid is the main source of coverage for those with substance use disorder, and many are eligible through Medicaid expansion, a population particularly targeted by the cuts.

The E&C markup: The Energy and Commerce Committee advanced the bill after a nearly 27-hour markup.

The Budget and Rules Committees: After some opposition, the House Budget Committee voted to advance the bill late on Sunday. The House Rules Committee then advanced it to the floor on Wednesday after some changes, including speeding up implementation of the Medicaid work requirements, expanding the criteria for states that could lose a portion of federal payments if they provide coverage to undocumented immigrants, and incentivizing states not to expand Medicaid.

Passage in the House: The House passed the bill Thursday morning in a 215-214 vote.

What’s next: The bill now moves to the Senate.

• But: Some senators remain opposed to Medicaid cuts and other provisions included in the House bill. The bill is likely to be changed further in the Senate, but it remains to be seen how the different factions will be reconciled to keep enough support for final passage.