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States Estimating Large Medicaid Cost Shifts, Coverage Losses Under House GOP Plan

March 20, 2017 at 3:45 PM

The Republican health plan that the House plans to consider on Thursday would force states to spend billions more to maintain their Medicaid programs (including the Affordable Care Act’s Medicaid expansion to low-income adults) or, far likelier, cut hundreds of thousands of low-income residents off Medicaid, most of whom would end up uninsured, according to projections by a growing number of state policymakers and independent researchers.

The House plan would cut the federal matching rate for each new expansion enrollee starting in 2020, effectively ending the expansion in the 31 states (plus the District of Columbia) that have adopted it. It also would impose a per capita cap on federal Medicaid funding for all of Medicaid. Combined, these changes would cut federal Medicaid spending by $880 billion over ten years and lower the number of Medicaid beneficiaries by 14 million in 2026, relative to current law, the Congressional Budget Office (CBO) estimates.

Among projections in individual states:

  • Ohio. Governor John Kasich’s administration projects that Ohio would have to raise state spending by $7.8 billion over eight years to keep its Medicaid expansion. If the state repealed its expansion, 750,000 people would lose Medicaid, most of whom would end up uninsured. Ohio also projects that its overall Medicaid program would exceed its per capita cap allotments by 2025, forcing the state to cover all costs above the cap or curtail services to children, seniors, and people with disabilities.
  • Michigan. State law mandates repealing the expansion if federal financial support falls below Affordable Care Act levels and the state savings from the expansion can’t make up the difference. The state’s Senate Fiscal Agency projects that this “trigger” would be pulled within the first nine months of 2020, meaning the 650,000 Michiganders projected to be enrolled in the expansion that year would lose coverage. If the state changed the law to let the expansion continue, it would have to raise $667 million over just 21 months to do so, the Senate Fiscal Agency projects.
  • Arizona. If Arizona froze enrollment for all childless adults in 2020, 134,000 people would lose coverage that year and 383,000 would lose coverage by 2023, the state Medicaid agency projects. If the state froze enrollment just for people with incomes above the poverty line, 108,000 people would lose coverage by 2023 and the state would have to spend an extra $1.5 billion over six years to maintain coverage for the remaining enrollees due to reduced federal funding.
  • Colorado. The state’s federal Medicaid funding would fall by $340 million in 2020 and by $14 billion over ten years, according to the Colorado Health Institute, an independent research organization. Because that would likely force the state to eliminate its Medicaid expansion, the Institute estimates that 600,000 fewer people would be enrolled in Medicaid in 2030 than under current law. Most of those losing coverage would end up uninsured.
  • Virginia. The state has not expanded Medicaid but would lose $1.8 billion in federal Medicaid funding by 2026 under the House bill’s per capita cap, according to the Department of Medical Assistance Services. Virginia has some of the country’s most restrictive eligibility rules for non-disabled adults: parents are only eligible if they make less than 38 percent of the poverty line and there is no coverage for childless adults. This means Virginia could only make up for the loss in federal funds by cutting services for children, seniors, and people with disabilities.
  • Minnesota. Federal Medicaid funding for the state would fall by $2 billion in the first 18 months and by $28 billion over ten years, the state’s Department of Human Services projects.
  • Washington. The state would need to raise spending by $1.3 billion just in 2022 to maintain coverage for the 600,000 expansion enrollees that year, the governor and state insurance commissioner project.

To make matters worse, two-thirds of states face revenue shortfalls this year or next, so they’d be even less likely to raise spending enough to offset the House Republican bill’s damaging Medicaid cuts.