New CBO analysis shows deeper Medicaid cuts under Senate healthcare bill

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Medicaid spending under the Better Care Reconciliation Act of 2017 would be approximately 35% lower in 2036 compared with spending expected under the current law, according to a new analysis of the legislation released Thursday by the nonpartisan Congressional Budget Office.

An analysis released Monday by the office had estimated that Medicaid spending under the legislation proposed by Senate Republicans would decrease by 26% in 2026 compared with spending forecast under the Affordable Care Act, which also is known informally as Obamacare. The CBO said it prepared the additional calculations at the request of Sen. Bernie Sanders (I-VT), the ranking member of the Senate Budget Committee, and Sen. Ron Wyden (D-OR), the ranking member of the Senate Finance Committee.

“Medicaid becomes subject to a cap in spending beginning in 2020 that would not keep up with medical costs, pushing states to raise taxes or cut care from vulnerable populations including children, Americans with disabilities and seniors who rely on Medicaid for long-term care,” Wyden said in a press release explaining his reasoning behind the request. “The growth rate of the cap becomes even more restrictive after 2024, two years before the end of the traditional scoring window. An analysis of the longer-term impacts will give a more complete and accurate view of the consequences of these caps on Americans' lives.”

Under the BCRA, overall Medicaid spending would go up 5.1% annually during the next two decades, in part because prices for medical services would increase, the CBO said. Spending would increase by 1.9% a year through 2026 and then approximately 3.5% a year in the following decade. These percentages are lower than increases that would occur under the ACA.

The CBO said that making projections related to federal spending on Medicaid becomes more difficult further into the future, because people's health, the delivery of healthcare and states' decisions about Medicaid eligibility and covered benefits could affect them.

Senior living providers continue to have reason for concern related to the provision of home- and community-based services funded via Medicaid, the report suggests. Unlike nursing home care, most HCBS are optional under Medicaid.

“Under this legislation, after the next decade, states would continue to need to arrive at more efficient methods for delivering services (to the extent feasible) and to decide whether to commit more of their own resources, cut payments to healthcare providers and health plans, eliminate optional services, restrict eligibility for enrollment, or adopt some combination of those approaches,” according to the new analysis. “Over the long term, there would be increasing pressure on more states to use all of those tools to a greater extent.”

Read more about healthcare reform in the articles listed below under “Related Articles.”

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