State Analyses: GOP Health Bills Will Fuel Deep Medicaid Cuts

Republican senators and Administration officials claim the Senate health bill’s Medicaid changes won’t leave anyone worse off, but both the Congressional Budget Office (CBO) and a growing number of state-based analyses are concluding that millions of people all over America would lose their Medicaid coverage due to the huge federal Medicaid funding cuts under both the House and Senate bills.

Senator Pat Toomey, for instance, says Medicaid will “never” be cut under the Senate bill. Meanwhile, Health and Human Services Secretary Tom Price says “we would not have individuals lose coverage.” Flatly contradicting these claims, CBO estimates that the bill would cut federal Medicaid spending by $772 billion over the next ten years and reduce Medicaid enrollment by 15 million people in 2026, relative to current law.

And a growing number of states — including Senator Toomey’s state of Pennsylvania — have themselves projected that the Senate bill, like its House-passed counterpart, would lead to huge Medicaid cuts and coverage losses.

For example:

• Alaska would lose $2.8 billion in federal Medicaid funds between fiscal years 2020 and 2026 — or 27 percent of its federal Medicaid funding — under the House bill, an analysis last week for the state’s Department of Health and Social Services finds. Alaska was one of 31 states that expanded their Medicaid programs under the Affordable Care Act, and the cuts to federal Medicaid expansion funding would force the state to spend five times more to maintain coverage for this group in 2024 than under current law, as we’ve shown. In all likelihood, a cost shift of this magnitude would force the state to end coverage for the 30,000 people in this group.
• Arizona would lose as much as $7.1 billion in federal Medicaid funds between fiscal years 2018 and 2026 under the Senate bill, according to the state Medicaid agency. This reflects the combined effect of lowering the federal matching rate for Medicaid expansion funding, converting Medicaid to a per capita cap with fixed annual federal funding, and restricting state provider taxes. Arizona is one of nine states with a “trigger” in state law eliminating expansion coverage if the federal matching rate is cut; this alone would cause 400,000 Arizonans to lose Medicaid coverage.
• Montana would lose $4.8 billion in federal Medicaid funds between fiscal years 2020 and 2026 — or 35 percent of its federal Medicaid funding — under the House bill, an analysis for the Montana Healthcare Foundation finds. Like Arizona, Montana has a trigger that would automatically end coverage for the state’s 70,000 expansion enrollees.
• Ohio would lose $58 billion in federal Medicaid funds over ten years under the Senate bill, according to the low-end estimate from the Center for Community Solutions. The Senate bill would make deeper cuts to Ohio’s funding than the House bill would, the report found.
• Pennsylvania would lose $4.5 billion in federal Medicaid funds each year under the GOP bills, Governor Tom Wolf’s administration projects.

CBO earlier estimated that the House-passed bill would cut Medicaid funding by $834 billion and Medicaid enrollment by 14 million. In addition, the Urban Institute estimated that states would have to spend $374 billion more over ten years to maintain their existing Medicaid programs in the face of the House bill’s cuts.

States would have few options for responding to dramatically lower federal funding, as a recent Kaiser Family Foundation report shows. They could raise taxes, cut eligibility, reduce benefits, or cut provider payment rates. But the Medicaid cuts in the Senate and House bills are so large that states would almost certainly have to end expansion coverage and make other cuts in their core Medicaid programs.