CBO: Senate healthcare bill would cut Medicaid funding by $772B through 2026

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Senate Republicans' bill to replace the Affordable Care Act would cut federal spending on Medicaid by $772 billion through 2026, according to an analysis released Monday afternoon by the Congressional Budget Office and the Joint Committee on Taxation.

Spending on the Medicaid program would decrease in 2026 by 26% under the Better Care Reconciliation Act of 2017 compared with what CBO projects under current law, the report authors predicted.

“The BCRA's cuts to Medicaid are even more extreme than those in the House bill ... and include the per capita cap restrictions that make these payment reductions even more draconian over time,” LeadingAge President and CEO Katie Smith Sloan said in a statement. “The Senate should not be fooled; although the cuts will be smaller in the early years, they will be larger in the long run.”

 BCRA versus AHCA

The Congressional Budget Office and Joint Committee on Taxation have scored both the American Health Care Act proposed by Republicans in the House of Representatives and the Better Care Reconciliation Act proposed by Senate Republicans. Here are some of the ways their effects differ.

Cuts to Medicaid:

$834 billion through 2026 under the AHCA, $772 billion under the BCRA

Total uninsured:

51 million in 2026 under the AHCA, 49 million under the BCRA

Medicaid spending cuts and changes to the ACA's subsidies for nongroup health insurance would be responsible for most of the savings realized under the legislation, according to the cost estimates in the report. The CBO and JCT calculate that, from 2017 to 2026, the bill, if it becomes law, would reduce direct spending by $1.022 trillion and reduce revenues by $701 billion, for a net deficit reduction of $321 billion in that time.

News of the bill's effects on the Medicaid program did not surprise advocates for older adults.

A representative of the National Center for Assisted Living told McKnight's Senior Living that release of the CBO report reinforced the organization's concern that the Senate bill “may further threaten access to home- and community-based services because states will have to scale back their programs.”

Sloan, too, said that the estimated $772 billion in Medicaid payment cuts under the BCRA “will directly impact the ability to provide home- and community-based services for vulnerable individuals and result in a shift of increased costs for emergency room and hospital care to Medicare.”

Indeed, in its report, the CBO suggested that, as providers fear, the bill could force states to reduce or eliminate funding for optional services — and home- and community-based services provided by assisted living operators and others (unlike nursing home care) are considered optional under Medicaid.

“With less federal reimbursement for Medicaid, states would need to decide whether to commit more of their own resources to finance the program at current-law levels or to reduce spending by cutting payments to healthcare providers and health plans, eliminating optional services, restricting eligibility for enrollment through work requirements and other changes, or (to the extent feasible) arriving at more efficient methods for delivering services,” the report stated. “CBO anticipates that states would adopt a mix of those approaches, which would result in additional savings to the federal government.”

49 million uninsured by 2026

Overall, according to the CBO, the Senate bill would increase the number of people who are uninsured by 22 million in 2026 relative to the number predicted under the ACA, slightly fewer than the 23 million increase in the number of uninsured estimated for the House-passed American Health Care Act. By 2026, approximately 49 million people would be uninsured under the Senate bill if it were to become law, according to the analysis, compared with 28 million who would not have coverage that year under the ACA.

“The increase would be disproportionately larger among older people with lower income — particularly people between 50 and 64 years old with income of less than 200 percent of the federal poverty level,” according to the report.

Like the House bill, the BCRA allows health insurers to charge premiums to those aged 50 to 64 years that are five time as much as they are for younger adults; under the ACA, insurers can charge three times as much.

The final vote on the bill in the Senate is expected Thursday or Friday. With all Democrats opposed, all but two Republican senators must vote for the bill for it to pass.

See the articles below, under "Related Articles," for more information on efforts in Congress to replace the ACA.

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