The GOP’s on the Verge of Passing a Bill That Will Phase Out Medicaid in its Entirety

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Time to panic.

Senate Republicans are on the cusp of passing a bill that will eliminate hundreds of billions of dollars worth of health funding, destabilize insurance markets, and eventually phase out Medicaid in its entirety. Less than two months after three Republican senators stopped an earlier effort to strip away much of America’s health care safety net, millions of Americans’ health care is now in very serious peril.

The new Trumpcare legislation — often referred to as “Graham-Cassidy” after Sen. Lindsey Graham (R-SC) and Bill Cassidy (R-LA), its leading proponents — contains several provisions undercutting the Affordable Care Act. It eliminates subsidies helping many millions of Americans purchase health insurance on the Obamacare exchanges and Obamacare’s Medicaid expansion, replacing this funding with a less generous block grant to states.

Then, this block grant abruptly disappears in 2027, leaving many millions of Americans with nothing.

Meanwhile, the bill does not simply permit states to eliminate protections for people with preexisting conditions, it potentially allows insurers to raise premiums on an individual the moment they get sick. Thus, a healthy person who paid their premiums all along could suddenly find those premiums jacked up to prohibitive levels the moment they actually need their insurance to be there for them.

Then, as an additional blow to people with individual health plans, the bill eliminates the Affordable Care Act’s individual mandate — an unpopular but necessary provision that helps stabilize insurance markets by preventing people from waiting until the moment they

get sick to purchase insurance. According to the Center on Budget and Policy Priorities (CBPP), repealing the individual mandate alone will “raise the number of uninsured by 15 million relative to current law in 2018 and increase individual market premiums by 20 percent.”

In total, an estimate shared by former Centers for Medicare and Medicaid Services head Andy Slavitt predicts that 32 million people will lose health insurance in the next decade if this latest version of Trumpcare becomes law.

And that’s not the end of it.

Nearly 75 million Americans are covered by Medicaid, the landmark Great Society program primarily serving the poor and the disabled. The Graham-Cassidy bill would eventually phase out Medicaid in its entirety, causing that program to shrink more and more with each passing year.

This process would occur gradually. Though all of the funding that went into the Affordable Care Act’s Medicaid expansion is cut off in 2027, the bill only cuts the pre-Obamacare Medicaid program by 8 percent in 2026. Ultimately, however, it would shrink Medicaid so much that the program would be effectively worthless.

The Medicaid phase-out results from a shrinking cap on Medicaid expenditures. As CBPP explains, the value of this cap “would grow each year more slowly than the projected growth in state Medicaid costs per beneficiary.” For some Medicaid beneficiaries, this phase-out will occur relatively quickly. “The cap on Medicaid spending for children and non-disabled, non-elderly adults,” for example, “would rise each year by the general inflation rate, which is about 2.5 percentage points lower than projected increases in per-beneficiary costs for those groups.”

For other Medicaid beneficiaries, the cap will grow according to “the percentage increase in the medical care component of the consumer price index for all urban consumers,” which the Congressional Budget Office (CBO) estimates will be 3.7 percent between 2017 and 2026. Yet CBO also estimates that Medicaid inflation will be slightly higher, 4.4 percent on per-enrollee basis. Thus, while the new Trumpcare bill will not phase out Medicaid for elderly and disabled beneficiaries as fast as it will phase the program out for other beneficiaries, the elderly and the disabled will also see their health coverage ground down over time.

 

Reprinted with permission from Think Progress