$756 billion Medicaid reduction in revised BCRA affected by HCBS pilot projects, CBO says

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The July 20 version of a Senate bill to replace the Affordable Care Act would result in a $756 billion reduction in Medicaid spending through 2026 compared with a $772 billion reduction during that same time period predicted under the June 26 version, according to an analysis released Thursday by the Congressional Budget Office.

The $16 billion difference, according to the Joint Commission on Taxation, is mainly due to two new provisions in the revised version of the Better Care Reconciliation Act.

First, $8 billion would be made available to states (as selected by the Health and Human Services secretary) to provide home- and community-based services through pilot projects from 2020 to 2023.

Also, up to $5 billion could be exempted from a per capita cap or block grant (at a state's option), from 2020 to 2024, for Medicaid spending in areas of states where the HHS secretary has declared public health emergencies.

Enacting this version of the BCRA, estimated the CBO, would reduce federal deficits by $420 billion from 2017 to 2026. The largest savings would come from a reduction in total federal spending for Medicaid.

The analysts did not estimate the longer-term effects of this version of the legislation on Medicaid spending but said they probably would be “very similar” to those for a previous version of the legislation. For that version, the CBO estimated that Medicaid spending would be about 35% lower in 2036 than it would be under the agency's extended baseline.

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