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Republican Health Reform Bill Would Have Big Impact on MassHealth Coverage

Republican Health Reform Bill Would Have Big Impact on MassHealth Coverage

March 13, 2017

Impact of ACA repeal bill on Massachusetts Medicaid

The Republican ACA legislation being moved through the House contains Medicaid provisions that, if passed, would fundamentally alter the program that provides health care for over 70 million vulnerable Americans.  National estimates are that millions of Medicaid recipients would lose coverage under the proposal.

In Massachusetts, the impact would be particularly devastating. This was the conclusion of a recent presentation issued by the Blue Cross of Massachusetts Foundation, based on research done by the national law/consulting firm, Manatt.

Their presentation (linked here) analyzes the various Medicaid-related provisions of the proposal that would impact Massachusetts. The proposal freezes enrollment in the Medicaid expansion starting in 2020. The expansion provides comprehensive coverage to around 300,000 adults here. In 2017, Massachusetts received some $1.7 billion in federal matching funds for the expansion population. The bill also freezes a scheduled increase in our federal matching rate for this population, costing Massachusetts an additional millions over the next two years.

Congressional Republicans also propose to restructure Medicaid payments to states by imposing “per capita” caps. Currently, states spend what is necessary to provide medical care to people eligible for Medicaid, which include low income adults and children, pregnant women, seniors, and people with disabilities. If per capita caps are implemented, the federal government would give each state a fixed quantity for Medicaid spending annually, based on state Medicaid costs in previous years.

The goal is to cut federal Medicaid spending, at the expense of state budgets and the health of our most vulnerable populations. The Republican proposal uses 2016 as the base year for determining how much to appropriate each state and that amount would only be adjusted each year according to the Consumer Price Index for medical care (CPI-Med). However, in a high-cost health care state such as Massachusetts, CPI-Med will not adequately capture the rising cost of healthcare. The result is a compounding effect, in which every year the gap widens between the funds Massachusetts needs to maintain basic Medicaid coverage and benefits for residents and the funds it receives. Over time, the state would lose billions, at an accelerating rate.

In addition, by capping Medicaid this way, states would be left helpless in the face of major health care crises, such as a major flu breakout, or an economic downturn that pushes more people onto the Medicaid rolls.

Although the wording is not completely clear, it appears the Republican language would also preclude the state from receiving funds under the MassHealth Waiver agreement with the federal government, finalized last year. The waiver supports the restructuring of MassHealth, the state’s Medicaid program, to promote integrated behavioral and long-term care, and innovative support for focusing on the social factors that keep patients healthy. The waiver also addresses the opioid addiction crisis by expanded access to recovery-oriented substance abuse services. This could mean loss of hundreds of millions of dollars for Massachusetts health care.

In addition to installing per capita caps, the Republican proposal includes other provision designed to weaken Medicaid. Essential health benefits for Medicaid recipients codified under the ACA would be revoked, making it easier to cut benefits. Legal immigrants and naturalized citizens would lose an up to 90-day coverage period allowing them time to submit citizenship or immigration documents. And finally, the Medicaid expansion authorized under the ACA would be rolled back starting in 2020, jeopardizing coverage for millions of Americans and over 300,000 Massachusetts residents.

                                                                                                                                                                                       -- Alec Lebovitz