The House Republicans were locked up in their basement room getting their Repeal and Replace healthcare system/bill finalized. But no one could find out what the secret plan was. They vowed to push through the plan to repeal and replace the Affordable Care Act with a system of tax credits that could be used to purchase health insurance, but they are finding that their efforts are facing string resistance within the party, as evidenced by Senator Rand Paul’s ranting. Endorsed by House Speaker Paul Ryan, the 100 page draft legislation would eliminate Obamacare’s individual mandate that compels people to have insurance, as well as all the taxes linked to the law. Income-based government subsidies to buy insurance would, from 2020, be replaced with tax credits based on age, ranging from a $2,000 subsidy for people under 30 to $4,000 for beneficiaries over 60. The Week looked further and found that the tax credits would be refundable, meaning that lower-income people could receive a larger amount than they paid in taxes. The proposal would also dial back Obamacare’s expansion of Medicaid in 31 states and offer states funds to establish high-risk pools to cover uninsured people with preexisting conditions. What about Medicaid? It’s the program that everyone confuses with Medicare. But Medicaid, the half-century-old government health plan for the poor, is actually bigger than its more famous cousin, covering some 70 million Americans at any one time. Medicaid is the nation’s public health insurance program for people with low income. The Medicaid program covers more than 70 million Americans, or 1 in 5, including many with complex and costly needs for care. The vast majority of Medicaid enrollees lack access to other affordable health insurance. Medicaid covers a broad array of health services and limits enrollee out-of-pocket costs. The program is also the principal source of long-term care coverage for Americans. As the nation’s single largest insurer, Medicaid provides significant financing for hospitals, community health centers, physicians, and nursing homes, and jobs in the health care sector. The Medicaid program finances over 16% of all personal health care spending in the U.S. Expanding Medicaid was a central pillar of the Affordable Care Act, helping to bring health coverage to more than 20 million previously uninsured people. But Medicaid has long been a political football. Now, Republicans are talking about dramatically rolling it back and restructuring the way the federal government pays for it. How would that happen? And what would the changes mean for the tens of millions of poor Americans who rely on Medicaid? If you’re a little rusty on block grants and other federal funding formulas, here are some Medicaid basics. What does Medicaid do? Quite a lot. Medicaid (which is called Medi-Cal in California) and the closely related Children’s Health Insurance Program together are the nation’s largest insurer, providing coverage to nearly 40% of American children and almost two-thirds of nursing home residents. Each state operates its own Medicaid program. All states are required to provide a basic set of benefits to poor people who qualify. Historically, children were the largest population served by Medicaid, accounting for about half of total enrollment. But elderly and disabled people on the program are by far the costliest, accounting for almost two-thirds of Medicaid costs even though they make up less than a quarter of enrollees.
The federal government and state governments through a complex formula that provides more-generous federal aid to historically poor states and less-generous federal assistance to wealthier states jointly fund Medicaid. Importantly, because Medicaid is an entitlement program, federal funding is guaranteed, even during recessions when enrollment in safety-net programs like Medicaid typically spikes. What did Obamacare do to Medicaid? Medicaid originally was designed to cover only certain vulnerable people, including poor children, pregnant women, the disabled and the elderly. That meant that in most states, poor adults without children, including many homeless people, couldn’t qualify for coverage. The healthcare law tried to change that. It made hundreds of billions of dollars of new federal aid available to states to help them expand coverage to low-income childless adults. But the Supreme Court said the expansion had to be voluntary. And 19 states have declined the aid. Republican leaders in those states contend Medicaid is inefficient and financially unsustainable. Has the expansion worked? By some important measures it has. In the states that expanded Medicaid, the share of adults without insurance has been cut almost in half, from 18.4% in 2013 to 9.3% in the first nine months of 2016. By contrast, the uninsured rate for adults declined much more slowly in states that did not expand Medicaid, falling from 22.7% to 17.5%, according to survey data from the U.S. Centers for Disease Control and Prevention. Of course, it’s still too early to say whether giving more people health coverage is going to make them healthier. But states that have expanded Medicaid have seen a flood of interest from poor patients, many of whom had delayed care for years. And early evidence suggests that these patients are getting the medical care they need. So, what’s the problem? In a word, the problem is money. It costs a lot to provide health coverage to millions of poor people, many of whom hadn’t been taking care of themselves. This year, Medicaid spending likely will top $550 billion. Republicans say that’s not sustainable. Many states leaders also say they want more flexibility to run their Medicaid programs differently. They say they could find more cost-effective ways to provide coverage if they were freed from federal rules. What are Republicans proposing? There are basically two ideas on the table: giving states more flexibility and overhauling the way that Medicaid is funded. Medicaid is a federal-state program. Subject to federal standards, states design and administer their own Medicaid programs. Beyond the federal requirements, states have extensive flexibility to determine covered populations, covered services, health care delivery models, methods for paying physicians and hospitals, and many other aspects of their Medicaid programs. States can also get Section 1115 waivers to test and implement approaches that diverge from federal Medicaid rules but that the Secretary of Department of Health and Human Services (HHS) determines advance program objectives. All Americans who meet Medicaid eligibility requirements are guaranteed coverage. The federal government matches state Medicaid spending on an open-ended basis. The guarantee of federal matching funds increases state resources for coverage of their low-income residents and also permits state Medicaid programs to respond to demographic and economic shifts, changing coverage needs, technological innovations, public health emergencies such as the opioid addiction crisis, and disasters and other events beyond states’ control. Medicaid is a complex program because it has evolved over time to serve diverse populations with a wide range of needs, including many individuals who are very poor and very frail, and because of wide variation across state Medicaid programs. Nearly all Republicans agree that states should get more freedom. That would allow states to charge Medicaid patients higher co-pays when they see a doctor or make them pay monthly premiums for coverage. Some states want to require adults on Medicaid to work. Some want to limit how long people can get Medicaid coverage or restrict which benefits they get. The second idea is more complicated … and more controversial. For decades, congressional Republicans have wanted to cap how much the federal government gives states every year for Medicaid. That’s a big difference from the current system, in which the amount of federal aid depends on how much medical care patients receive. If patients are sicker and have higher medical bills, a state gets more money. If patients are less sick, the state gets less. Many GOP lawmakers like what’s called a “per capita cap.” That means the federal government would give each state a fixed amount of money every year for every person who qualifies for Medicaid. That amount then would increase annually by a set amount, likely linked to inflation. Republicans say this would make Medicaid more sustainable. What would these proposals mean? There’s a lot of debate about this. Making poor people pay more for their medical care — or put “skin in the game,” as backers of this approach say — raises a lot of concerns among healthcare experts, who fear it could discourage poor patients from getting the medical care they need. The evidence from Indiana, which is pioneering broader use of co-pays and premiums in Medicaid, is mixed so far. Scaling back federal money for Medicaid is potentially even more problematic. Medicaid is currently among the leanest healthcare programs in the country, paying very low rates to physicians and hospitals in many parts of the country. Basic math dictates that it’s hard to provide as much care with less money. That has many experts worried that a per capita cap system like the one being discussed by congressional Republicans could force states to scale back protections for many poor patients. A Medicaid per capita cap would shift large and growing costs, as well as substantial risks, to states. That would put increasingly severe pressure on state budgets and likely lead to significant Medicaid cuts affecting low-income beneficiaries and the health care providers and health plans that serve them. While federal funding under a per capita cap would rise if Medicaid enrollment grew (unlike with the funding formula under a block grant), the federal funding cuts a per capita cap imposes would result in states making considerably fewer people eligible or otherwise limiting enrollment. Moreover, like a block grant, a per capita cap would not respond to greater-than-expected medical cost growth and the impact of the aging of the population. Combined with the likely repeal of the Medicaid expansion, the end result of a per capita cap would almost certainly be the loss of health coverage and less access to needed health care for tens of millions of low-income Americans who rely on Medicaid. Most patients advocates, disease groups, physicians and hospitals don’t like this approach. And funding limits always have been more popular with Republicans in Congress than Republican governors. Many GOP governors, who have to balance their budgets and take care of their poorest constituents, don’t want the federal government to cut what it contributes for Medicaid. The draft bill is consistent with what Republicans have been saying they want to see in place of Obamacare, says Rodney Whitlock, vice president of health policy at ML Strategies. “No surprises here,” says Whitlock, who was formerly the Republican health policy director for the Senate Finance Committee. “These are all ideas Republicans have championed. Now the Congressional Budget Office will decide if they agree.” The Congressional Budget Office will “score” the ultimate bill, estimating how many people it’s likely to cover and its impact on the federal budget. Spokesmen for the House Energy and Commerce, and Ways and Means committees, which are drafting the legislation, declined to comment on the leaked bill. It’s not clear that the details in the two-week-old draft bill, such as the size of the tax credits, are still being considered. One House staffer says lawmakers are testing different scenarios with the Congressional Budget Office, comparing cost and coverage levels, and fine tuning the legislation. The bill attempts to encourage healthy people to buy insurance by mandating that they cannot be charged more for existing medical conditions, or, once they get sick, if they maintain continuous coverage. People who elect not to buy insurance at the outset would pay a surcharge when they do, and could end up paying more if they’ve been ill. Levitt is not convinced the Republican’s continuous coverage plan would work. “Republicans are struggling to find the Holy Grail of how to get healthy young people to buy insurance,” he says. “I’m not sure they’ve found it here, but it’s a legitimate struggle.” Senate Democrats denounced the proposal. “This isn’t a replacement, it’s a recipe for disaster,” says Senate Democratic Leader Charles Schumer, N.Y. “Republicans are determined to put insurance companies back in charge, make health insurance more expensive for millions of Americans, restrict women’s access to vital health services by defunding Planned Parenthood, shift costs to states and dismantle Medicaid, while kicking millions more off of their plan.” No matter where you stand on the political spectrum, health care under the Affordable Care Act is going to change in the next few years. The Republican-led Congress has vowed, as I have mentioned, to “repeal and replace” the health law known as Obamacare. That has left many people anxious and confused about what will happen and when. So NPR’s Morning Edition asked listeners to post questions on Twitter and Facebook, and we will be answering some of them here and on the radio in the weeks ahead. Many of the questions so far have to do with timing. For example, Steva Stowell-Hardcastle of Lewisburg, Penn., says: “I’m confused about what parts of the ACA have been repealed and when those changes take place.” First, despite social media headlines, nothing substantive has been changed in 2017, so far. That’s because making these changes is harder than it looks, as was intimated by President Trump when he said- that health insurance policy is difficult. “It’s an unbelievably complex subject, nobody knew that health care could be so complicated.” In January, Republicans in Congress passed a budget resolution that called for major changes to the law to be made in a subsequent bill. Even though that process would allow them to pass a bill without Democratic votes, they haven’t been able to agree on what those reforms should look like. And there are several other obstacles. First of all, they won’t be able to repeal everything in one go, which counters a lot of the rhetoric coming out of the election. And they would be limited in what parts of the law they can replace. That said, the Trump Administration has taken some action, but no concrete changes – yet. In January, Trump signed an executive order calling for federal agencies to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the act” that would “impose a fiscal burden” on states, individuals, healthcare providers, and others in the health industry. While that could be widely interpreted, so far the only federal action in response to that order has come from the IRS. The IRS says it will not strictly enforce the “individual mandate” that requires most Americans to have health insurance. The agency noted, however, the requirement is still law. A related question comes from Kathryn Henry of Iowa City, Iowa. She asks “if it is repealed, what happens to people like me who currently have insurance through it and when?” Both President Trump and GOP congressional leaders have insisted that they want a smooth transition from the current system to a new one, particularly for the 11 million or so people who purchased coverage on the federal or state health insurance exchanges since the law took effect. “We don’t want to pull the rug out from under people while we’re replacing this law,” said House Speaker Paul Ryan, R-Wisc., in January. Trump has insisted that repealing the law and replacing it be done “essentially simultaneously,” so as not to leave people without insurance. Unless something unexpected happens, people who purchased insurance for 2017 should be covered through the remainder of the year. The bigger question is what happens in 2018. The uncertainty alone is prompting some insurers to pull out of the individual insurance market — the market in which people don’t get insurance through their employer. The individual market is the most affected by the health law. For example, the insurance company Humana has already said it won’t participate in the health insurance exchanges next year, and the CEO of Aetna told reporters that his company might drop out, too. If Congress deadlocks over how to overhaul the health law, more insurance companies could follow suit. Insurers were supposed to tell the federal government if they planned to participate in the insurance exchanges by May 3, but the Trump Administration has now given them until the end of June.
Also, with the discussion of vouchers for Medicare, should the older population be worried??? I think so!! The GOP really needs to listen to us all as to the real solution to this muddled conundrum of a healthcare system in jeopardy of real failure.