American Health Care Act’s Medicaid cuts would put significant pressure on states – Omaha World-Herald


WASHINGTON — This year’s health care debate in Congress has been dominated by talk about pre-existing conditions and private insurance premiums.

But that discussion overlooks the fundamental Medicaid overhaul on the table that could shift significant burdens onto states, said Robin Rudo
witz, a Medicaid expert with the nonpartisan Kaiser Family Foundation.

“States, I think, maybe haven’t been paying that close attention but could be left facing a lot of risk related to financing,” Rudowitz said.

Governors from both parties have started raising concerns about the proposal — including Republicans in Ohio, Massachusetts and Illinois.

Medicaid represents a federal-state partnership that provides coverage to eligible low-income adults, pregnant women, the elderly and people with disabilities. Many states opted to expand their Medicaid programs with additional federal support under the Affordable Care Act.

The House-approved American Health Care Act would roll back the federal support for expansion states and impose per-capita caps on the program. States also could opt to switch to a block grant.

A Congressional Budget Office analysis found that such changes would cut a total of $880 billion nationwide from the program over the next 10 years.

That figure doesn’t account for last-minute changes to the bill; the House passed it before the CBO could issue a new analysis.

Opponents say reduced federal support for Medicaid will force states into tough decisions to address the resulting shortfalls: raise taxes, cut other programs such as education or offer less in the way of health benefits.

In particular, a state like Nebraska that has offered optional Medicaid benefits such as dental coverage could move to pare those back.

The Senate has started its work on health care, and how the final legislation handles Medicaid could end up determining whether a bill ever makes it to President Donald Trump’s desk.

Senate moderates have balked at the cuts sent over from the House, even as some conservatives push to pare the program even further.

Members of the Nebraska and Iowa congressional delegations, meanwhile, reported no cries of alarm yet from their state officials.

A spokesman for Nebraska Gov. Pete Ricketts, a Republican, provided a statement criticizing the Affordable Care Act and calling for its repeal and replacement. The statement did not specifically address the House Medicaid proposals other than to note that the legislation is likely to evolve as it goes through the Senate.

But state health and insurance officials sent a lengthy letter to House Republicans earlier this year in which they addressed general and technical issues with Medicaid.

“Finance reform should promote flexibility and efficiency, not shift risk to states without authority to effectively manage costs,” they wrote.

They specifically cited the prospect of going to a per-capita model or block grant approach and said that any methodology should take into account unique approaches by states. Simply basing funding levels on historical spending doesn’t take into account fiscally prudent decisions made in many states, they wrote.

“States should have the opportunity to work directly with federal authorities to negotiate the terms of financing and programmatic changes,” they wrote.

In response to World-Herald inquiries, the spokesman for Iowa Gov. Terry Branstad, a Republican, reiterated Branstad and Lt. Gov. Kim Reynolds’ opposition to the Affordable Care Act as unsustainable and said Congress needs to “fix” health care, but did not offer thoughts on the impact of the Medicaid cuts.

“We simply do not know at this point how efforts in the House will affect our state,” spokesman Ben Hammes said. “It appears the Senate will be making substantial changes or even introduce their own bill. Before we have a final solution, we will wait and see how these changes will impact our state.”

Iowa faces a bigger challenge than Nebraska, as it opted to expand its Medicaid program under the Affordable Care Act.

Nearly 150,000 Iowans are covered under the expansion, with the state receiving $1.1 billion in federal funds to cover them from January 2014 to September 2015, according to Kaiser figures.

U.S. Sen. Chuck Grassley, R-Iowa and a senior member of the Finance Committee, said his son, who is a state senator, has warned him that the Medicaid cuts could mean quite a hit to Iowa’s state budget. Still, Grassley said, resources are limited.

“From 1965 until now we’ve had an open checking account for states, and when you have an open checking account for states, you see a lot of states have expanded Medicaid way beyond what’s reasonable, because the federal government’s going to pick up a big part of the tab,” Grassley said. “We’ve got to have some more fiscal responsibility at the federal level.”

Many opponents of the Medicaid cuts have noted that the House-passed bill comes with tax cuts that particularly benefit wealthier Americans.

“That’s very concerning to us — that tax reform would happen on the backs of America’s most vulnerable people,” said Linda Timmons, president and CEO of Mosaic, a nonprofit organization that provides services to people with intellectual and developmental disabilities.

Timmons said she is worried that limited funding would cause Nebraska to slide backward toward providing a more institutional rather than community-based approach to those with disabilities. Already many people fail to get timely access to services, she said.

“If we see flat funding or cuts in funding, I don’t know how we’re going to be able to competitively pay our staff,” she said.

Nebraska State Sen. Merv Riepe of Ralston, chairman of the Health and Human Services Committee, said he’s glad to see Congress tackling health care, because the current situation is unsustainable.

It’s no wonder some states that expanded Medicaid don’t want to relinquish the federal money they’re now receiving, he said.

“They like the billions of dollars that they’ve received and they think that they should be able to keep that,” he said. “With the national debt, I’m not sure how that’s possible.”

Riepe, a registered Republican in the officially nonpartisan Legislature, said he’s looking for a market-driven approach to health care that includes changes to delivery in a way that ensures people receive baseline care, but acknowledged that some reductions in benefits or additional work requirements for able-bodied Medicaid recipients may be necessary.

“I’m a real believer in personal responsibility not only for health care habits but also financially — having some skin in the game,” Riepe said. “If we don’t get that, it’s always easier to spend somebody else’s money than it is to spend one’s own.”

Certainly, if Congress follows through on cuts to federal funding, Nebraska will have to make choices, he said.

“If this is going to come down to us from the feds with less money, that means we’re going to have to in turn be real frugal,” Riepe said.

He said constituents have approached him with concerns, and he understands health care is a personal and potentially frightening issue.

“Stay calm, stay calm,” he said he tells them. “We’ll try to not overdrive our headlights on this thing. Let’s don’t get ahead of it. Let’s see where it unfolds. Stay engaged. Give your thoughts, share your concerns, and we’ll see where this thing ends up coming out.”

All five House members who represent Nebraska and western Iowa are Republicans and all five supported the legislation.

Rep. Don Bacon, who represents the Omaha-based 2nd District, said he has talked to state officials and to Children’s Hospital & Medical Center, which is largely dependent on Medicaid.

Bacon said it’s certainly compelling to visit a place like Children’s and see the babies who are relying on Medicaid to cover their care.

But he also said he has talked to House Speaker Paul Ryan and those who crafted the legislation and been assured that Nebraska won’t see a reduction in funding.

“We’ve got to keep our eyes on future years, obviously, but right now there shouldn’t be a reduction for Nebraska,” Bacon said.

Those on the front lines aren’t so sure about that.

In fact, Children’s remains opposed to the legislation, Dr. Richard Azizkhan, president and CEO, said in a statement.

“As an advocate and champion for all children, Children’s cannot support any bill that does not safeguard Medicaid funding, coverage and benefits for children,” Azizkhan said. “Children are not driving the cost of Medicaid, but will suffer the greatest under the recent proposal in Washington.”

He called for Congress to make changes to the legislation that would shield children from the financial repercussions of implementing a block grant or per-capita model, as well as maintaining their coverage and essential benefits structure.

Bacon repeatedly noted that if Congress adopts legislation and the funding proves to be inadequate, it can revisit the issue down the road.

“Whether you did this or not, costs could go up or down and we’ve got to keep our eyes on it,” Bacon said.

Riepe reiterated that it will take lawmakers time to work through everything.

“We need to figure out some way to get everyone some basic level of care. Whatever that is, I don’t know, and it might not be exactly what everyone wants,” Riepe said. “But we’re not going to leave people in the streets.”

joe.morton@owh.com, twitter.com/MortonOWH


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