At Least 1.4 Million Nonelderly Adults with Disabilities Would Lose Medicaid Under Graham-Cassidy – Center For American Progress

This column contains a correction.

With the clock ticking on fast-track authority allowing the GOP to ram through a health care repeal bill without a single Democratic vote, Senate Republicans have thrown one last Hail Mary in an attempt to repeal the Affordable Care Act (ACA) and end Medicaid as we know it. While last-minute changes are being filed as of writing, their latest repeal effort, championed by Sens. Lindsay Graham (R-SC) and Bill Cassidy (R-LA), would rip coverage away from 32 million Americans by 2027 and eviscerate protections for people with pre-existing conditions, such that a 40-year-old living with metastatic cancer could see her premiums increase by a staggering $142,650.

Previous CAP analysis has shown that due to the bill’s devastating Medicaid cuts alone, 19 million Americans would lose coverage, not counting those who would be kicked off Medicaid due to caps on federal funding that the legislation would impose. New analysis finds that, even according to conservative estimates, between 1.4 million and 1.8 million nonelderly adults with disabilities would lose vital Medicaid coverage as a result of the bill’s deep cuts,** risking a return to widespread institutionalization and pushing people with disabilities—and their family members—out of the workforce. (See Methodology)

Loss of Medicaid would mean loss of independence for millions of people with disabilities

In addition to the deep cuts it makes to Medicaid,** Graham-Cassidy would end Medicaid’s guarantee of coverage by implementing a so-called per capita cap on federal funding provided to states to cover eligible residents. As a result, states would be forced to either make up the difference or—much more likely—terminate people’s coverage through their Medicaid programs, increasing the number of people with disabilities who would lose coverage even further.**

While losing health coverage through Medicaid would be devastating for a broad range of groups, including seniors, children, and low-income individuals, loss of Medicaid would be particularly devastating for people with disabilities and serious health conditions. This is because, for millions of Americans with disabilities, Medicaid promises a great deal more than just health insurance—it promises independence.

As the nation’s largest provider of home- and community-based services, such as personal-attendant care, skilled nursing, and specialized therapies, Medicaid makes it possible for millions of people with disabilities to live independently and remain in their homes. Without those services, many would end up in costly and isolating institutions, setting the nation back 50 years or more to a time when people with disabilities commonly lived in institutions instead of in their communities.

Loss of Medicaid would push millions of people with disabilities out of the workforce

Meanwhile, Graham-Cassidy’s devastating cuts to Medicaid would also result in a widespread drop in people with disabilities participating in the nation’s workforce. In addition to enabling many people with disabilities to live independently instead of in institutions, Medicaid’s home- and community-based services also make it possible for many to work outside the home. Take Andraéa, a 33-year-old resident of Maryland who lives with muscular dystrophy and uses a power wheelchair. Thanks to the in-home personal-attendant services she receives through Medicaid, she is able to work in her dream job as an inclusion specialist at a large national organization. Without those services, she would be living in a nursing home, stripped of the independence that allows her to work and participate in public life.

What’s more, recent research links the ACA’s expansion of Medicaid to higher employment rates among people with disabilities. For instance, a study by researchers from the University of Kansas, the Urban Institute, and the University of North Carolina found that employment among nonelderly adults with disabilities rose in states that expanded Medicaid and fell in states that did not: Indeed, the employment rate for nonelderly people with disabilities was nearly 20 percent higher in expansion states compared with nonexpansion states.

People with disabilities already face substantially lower rates of labor force participation and much higher rates of unemployment than their nondisabled peers. Rolling back Medicaid expansion and ending Medicaid’s guarantee of coverage by instituting harmful per capita caps, as Graham-Cassidy would do, would risk pushing even more people with disabilities out of the workforce.

Conclusion

Loss of health coverage would be devastating for the tens of millions of Americans at risk of having insurance ripped away from them under Graham-Cassidy. But the bill’s deep Medicaid cuts would spell even more dire consequences for people with disabilities, for whom Medicaid means much more than just health insurance—it means freedom.

As Andraéa writes, “I have worked incredibly hard and have followed all the ‘right’ paths in order to enjoy a life of independence and happiness. One that doesn’t include nursing homes or living at an institution. All of that is threatened now.”

Rebecca Vallas is the managing director of the poverty to prosperity program at the Center for American Progress. Rachel West is an associate director of the poverty to prosperity program at the Center. Katherine Gallagher Robbins is the director of family policy at the Center.

Methodology

The authors’ estimates of Medicaid coverage losses are based on a September 2017 CAP analysis by Emily Gee, which estimates that 19 million nonelderly individuals would lose Medicaid coverage under the original Graham-Cassidy bill by 2027. The authors used data on Medicaid enrollment among nonelderly adults with disabilities between 2011 and 2015 from the nationally representative American Community Survey (ACS) 1-year estimates, accessed through the Integrated Public Use Microdata Series (IPUMS). The authors considered individuals disabled if they report experiencing one or more of the six categories of disability in the ACS. Not all of these disabilities are necessarily qualifying disabilities under the Medicaid program.

When the majority of states expanded their Medicaid programs under the ACA starting in 2014, the largest group of newly eligible Medicaid recipients comprised low-income nonelderly adults, a smaller share of whom report a disability than previously eligible Medicaid recipients. As a result of covering the newly eligible, the disability rate among Medicaid recipients dropped somewhat between the pre-ACA and post-ACA period. The authors compared the rate of disability in the pre-ACA period to the rate in 2015—the most recent year of data available in IPUMS—and calculated the implied (lower) rate of disability among the group who gained Medicaid coverage during that period by assuming that the pre-ACA rate of disability persisted among the participants who qualified for Medicaid under the pre-ACA standards. We consider this calculated disability rate a rough estimate of the disability rate among newly eligible low-income nonelderly adults, since these individuals account for the bulk of the increase in Medicaid enrollment following the implementation of the ACA. As part of this calculation, we assumed the previously eligible population nonelderly adult expanded from its pre-ACA size at a rate greater than population growth due in large part to the so-called woodwork effect (also known as the welcome mat effect). While there is no widely accepted estimate of the size of this effect—and research suggests that many such enrollees are children rather than adults—we adjusted the previously eligible population between 2012 and 2015 using two alternative reasonable assumptions to account for this. First, we adjusted the previously eligible nonelderly adult population according to the average annual growth rate of the total nonelderly adult Medicaid population in the pre-ACA period of 2011 to 2013. This produced a more conservative estimate of the calculated disability rate for the remaining population—particularly since some of the growth in Medicaid during this period was due to early adoption of Medicaid expansion in six states, including a generous expansion in the high-population state of California. Second, we adjusted the previously eligible population according to Kaiser Family Foundation analysis of data on expansion state enrollment from the Centers for Medicare and Medicaid Services. Other reasonable estimates of the woodwork effect and natural growth in Medicaid enrollment might yield alternative estimates for the disability rate for newly eligible, nonelderly adult enrollees.

Although states would have significant flexibility in how they absorb Medicaid cuts under Graham-Cassidy, health experts expect that, as with past Republican ACA repeal plans, newly eligible adults will make up the majority of those who would lose Medicaid coverage under the bill.* Thus, the authors apply the implied disability rate for newly eligible adults to 19 million individuals estimated to lose Medicaid coverage by 2027. If some states instead decide to implement Graham-Cassidy by taking away coverage for groups or individuals who were previously eligible for Medicaid, our estimate will likely understate the number of nonelderly adults with disabilities who would lose coverage because many of these groups experience disability at a higher rate than those who are newly eligible. Additionally, a greater number of nonelderly adults with disabilities can be expected to lose Medicaid coverage due to the per capita caps Graham-Cassidy puts into effect.

*Authors’ note: Personal communication with Emily Gee, health economist, Center for American Progress, September 2017.

**Correction, September 25, 2017: This column has been corrected to clarify which of Graham-Cassidy’s cuts to Medicaid the analysis reflects.

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