Congressional Medicaid Proposals Would Mean Big Cuts to Medicaid, Higher Costs for Texas

As CPPP’s Stacey Pogue recently explained, U.S. House leaders are expected to file legislation within days that will begin to repeal and “replace” the Affordable Care Act (“ACA” or Obamacare). Based on an outline made public in February, the bill is expected to result in fewer people being able to afford insurance—especially low- and moderate-income individuals—and in allowing insurance plans to cover fewer benefits.
Beyond cutting affordability and consumer protections for private health insurance coverage, the U.S. House outline also proposed a radical restructuring of Medicaid. Based on the outline, a leaked bill draft that was analyzed by many experts, and the actual bills filed and officially “scored” last summer (2016), last summer’s House bill did not just “bend the cost curve”—like dropping the growth in per-enrollee cost from six percent to three percent a year—but actually cut federal Medicaid funds to Texas below current levels by as much as 25  percent. So, the very first question we will ask when an actual bill is finally filed will be, “does it cut Texas Medicaid funds below current levels, which would force cuts to eligibility, benefits, or provider pay? And, by how much?”
Another critical point is that last summer’s bill would have cut Texas Medicaid by roughly $4.8 billion (20 percent of federal Medicaid dollars to Texas in 2016) in the second year of that law, regardless of whether Texas chose a Block Grant or a Per Capita Cap (also known as per beneficiary allotment). In other words, no matter what went into the complex formula for a state Medicaid block grant or per capita cap, Congress still planned to cut Medicaid funding to all the states below the base year! There is a big difference between “bending the curve” and this enormous cost shift from the federal budget to the state.
To give you a frame of reference, a $4.8 billion cut in federal Medicaid funds would be 48 times larger than the $150 million state dollar 2015 Medicaid Pediatric Therapy Cuts, and four to five times the size of even the massive 2003 Medicaid cuts (the $500 million federal funds annually then was just under 5% of total federal Medicaid funding for 2004).

Texas has many additional worries in a federal Medicaid cut-back, including whether we can keep our 1115 waiver dollars and other funds for hospitals; whether we will be locked in forever to physician and other health professional fees that have not had regular updates for over 20 years; whether we will forfeit an estimated $6 to $8 billion a year in Medicaid Expansion funding that 31 other states have received; and whether we can ever get federal dollars for our remaining uninsured or for over 200,000 Texans with disabilities on waiting lists for community care.
For a full check-list of all the issues and concerns for Texas Medicaid, see this new CPPP guide to understanding Medicaid Block Grant and Per Capita Cap proposals  and how they could impact (and damage) Texans’ access to health care. Then follow along with our CPPP team as we analysis the next Congressional proposals as they become official. Then we can all work together to make sure all our elected officials in Austin and Washington know exactly what is at stake for Texas.

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