National Update: ACA, Medicaid, CHIP, Budget

from National Family Voices:

ACA Replacement / Medicaid Legislation

The House of Representatives is scheduled to begin a on a one-week recess on Friday. The House leadership and the administration are hoping to garner enough votes before then for the House to pass an amended version of the House bill to repeal and replace the Affordable Care Act (ACA) -- the American Health Care Act (AHCA, H.R. 1628). As of this writing (Monday night), it is unclear whether this will be possible. See GOP struggles to find ObamaCare repeal votes (The Hill, May 1, 2017). The bill will not be brought to the House Floor for a vote unless the leadership has the commitment of enough House members to pass it. If all the Democrats vote against the bill, as expected, then the bill will not be approved if more than 22 Republicans oppose it. If brought to the Floor for a vote, the bill will incorporate the so-called MacArthur amendment, which was developed with the aim of gaining the votes of members of the most conservative House Republicans - members of the Freedom Caucus. While the Freedom Caucus has formally endorsed the bill as amended, the amendments have made it less likely that more moderate Republicans will vote for the bill. They are concerned about the consequences of the MacArthur amendment as well as the significant changes and cuts that would be made to the Medicaid program.

 

Medicaid provisions. The AHCA would still include its original Medicaid provisions. Most significantly, it would restructure the program so that federal payments to the states are capped each year based on the number of people covered, rather than based on what a state actually spends to provide care to Medicaid beneficiaries. See Essential Facts About Health Reform Alternatives: Medicaid Per Capita Caps (The Commonwealth Fund). The federal payments most likely would not keep up with actual Medicaid expenses, so Medicaid costs would be shifted to states, counties, localities and beneficiaries. In addition, the AHCA would roll back Medicaid eligibility for children ages 6 through 19 from 138 percent to 100 percent of the federal poverty level. Over ten years, federal payments to states would be cut by about $840 billion dollars, about 25 percent by year 10.

 

MacArthur amendment. Under the MacArthur amendment, the Secretary of Health and Human Services (HHS) could let states waive the ACA's requirement that insurance plans cover ten "Essential Health Benefits" (EHBs). Because the ACA's ban on annual and lifetime coverage limits and its cap on out-of-pocket expenditures are both linked to the EHBs, these consumer protections would also be at risk under the amended bill. If a state has a high-risk pool or similar program for people with pre-existing conditions, then it could also get a waiver of the ACA's "community rating" requirement for individuals who cannot demonstrate that they have maintained insurance coverage for all but 63 days of the prior twelve months. The AHCA does not change the ACA's requirement that insurers provide coverage to individuals with pre-existing conditions ("guaranteed issue"), but insurers in states with waivers could charge prohibitively high premiums to such individuals, or could sell policies that do not cover the benefits they need. Some policy analysts predict that the AHCA, with the MacArthur amendment, ultimately would eliminate the current protections for all people with pre-existing conditions, not just those who have not maintained continuous coverage. See New amendment to GOP health bill effectively allows full elimination of community rating, exposing sick to higher premiums (Brookings Institution, April 27, 2017).

 

Budget/Appropriations

Over the weekend, Republicans in the House and Senate reached an agreement on funding government agencies and programs through the end of FY 2017, which ends on September 30. It is expected that the bill will be approved by both the House and Senate and signed by the president by the end of this week. The bill actually increases funding for some of the programs that the administration had proposed cutting. For example, it increases funding for the National Institutes of Health by about $2 billion. The bill also provides increases in funding for HRSA; the Maternal and Child Health Block Grant, including an increase in funding for SPRANS (Special Projects of Regional and National Significance); the Healthy State Initiative; efforts to combat opioid abuse; Alzheimer's research; the Precision Medicine Initiative; the BRAIN Initiative (mapping the brain); and the National Center on Birth Defects and Developmental Disabilities Center (NCBDDD) at the Centers for Disease Control and Prevention (CDC). The bill provides level funding for the Leadership Education in Neurodevelopmental and Related Disabilities (LEND) programs. In addition, it also includes a permanent extension of health insurance for coal miners. (Note: Funding for Family-to-Family Health Information Centers is not made through appropriations legislation like this spending package; rather it is funded directly once the program is reauthorized.)

 

Notably, the spending bill does not "defund" Planned Parenthood. Nor does it include funding for cost-sharing reduction payments to insurers under the ACA, but the Trump administration has said that it will keep making these payments "for now." (Cost-sharing reductions reduce out-of-pocket expenses for lower-income consumers who purchase individual insurance policies through the ACA Exchanges.)

 

Here are the Republican summary and Democratic summary of the spending package.

 

CHIP

Funding for the Children's Health Insurance Program (CHIP) expires at the end of the current (2017) fiscal year. Child health advocates, including Family Voices, have been urging Congress to extend funding for the program as soon as possible, so that states are not left wondering whether they will have the funds needed to continue the program, and so they will not have to begin issuing termination notices to CHIP enrollees. States are required to provide such notices within a certain period before termination would occur, even if Congress assures the states that it will ultimately provide funding for the next fiscal year. States will exhaust their CHIP funds at different times. See Federal CHIP Funding: When Will States Exhaust Allotments? (MACPAC, March 2017.)

 

Like the congressional Medicaid and CHIP Payment and Access Commission (MACPAC) has recommended a five-year extension, children's health groups are seeking a five-year funding extension for CHIP, along with continuation of an enhanced federal match and the "maintenance-of-effort" requirement that states not narrow the CHIP and Medicaid eligibility and enrollment policies they had in place for children when the ACA was enacted in 2010. While there seems to be strong bipartisan support for the program in both houses of Congress, it is not clear when funding legislation will be taken up, as it likely will have to be attached to a larger bill. At this point, it is expected that other "health extenders" - provisions to extend funding for programs such as Family-to-Family Health Information Centers, home visiting, and community health centers - will be included in whatever legislation is used to extend CHIP funding.