Dive Brief:
Millions of people could lose coverage under potential policy changes to Medicaid under consideration by Republicans in Congress, according to a letter sent to lawmakers this week from the Congressional Budget Office.
One option, reducing the federal government’s share of costs for enrollees covered under Medicaid expansion, would reduce the federal deficit by $710 billion over the next decade. But in 2034, 5.5 million people would be removed from the safety-net program, with 2.4 million of these enrollees becoming uninsured, according to the CBO.
Another potential policy, placing a per-enrollee cap on federal spending, would remove 5.8 million people from Medicaid. Nearly 3 million of those people would lose coverage entirely. The policy would reduce the deficit by $682 billion, the analysis found.
Dive Insight:
Debates surrounding potential cuts to Medicaid — and their implications for patients and providers — have been heating up in Congress for weeks.
Last month, lawmakers approved a budget resolution that called for the House Energy and Commerce Committee, which oversees Medicare and Medicaid, to find $880 billion in savings. That budget goal is likely impossible to hit without targeting major healthcare programs under the committee’s purview, according to an earlier analysis published in March by the CBO.
The committee is expected to meet next week to mark up its portion of the reconciliation package and hash out legislation.
However, cutting Medicaid is a politically contentious move for Republican lawmakers. Some legislators have pushed back on potential cuts, and others have argued they’ll preserve Medicaid for the most vulnerable by targeting fraud, waste and abuse in the safety-net insurance program.
But Rep. Frank Pallone Jr., D-N.J., and Sen. Ron Wyden, D-Ore., who requested the latest CBO analysis, said the policies will ultimately limit benefits and result in coverage losses.
“This analysis from the non-partisan, independent CBO is straightforward: the Republican plan for health care means benefit cuts and terminated health insurance for millions of Americans who count on Medicaid,” Wyden said in a statement. “Republicans continue to use smoke and mirrors to try to trick Americans into thinking they aren’t going to hurt anybody when they proceed with this reckless plan, but fighting reality is an uphill battle.”
The letter from the CBO analyzes five potential policy options for Medicaid: setting the federal matching rate for the expansion population at the same rate as other enrollees; limiting state taxes on providers; setting federal caps on spending for the entire Medicaid population or just the expansion group; and repealing two regulations linked to eligibility and enrollment.
Most of the options reduce the funds available to states, according to the CBO. The agency expects states will replace about half of the reduced support with their own resources, and then reduce spending by cutting provider payment rates, reducing optional benefits and cutting enrollment.
For example, if Congress decides to limit provider taxes, where states levy taxes that finance a portion of their Medicaid spending, that would result in 8.6 million fewer people enrolled in Medicaid in 2034, including nearly 4 million becoming uninsured. The move would ultimately lessen the federal deficit by $668 billion, as the government would offer reimbursement for lower state spending, the analysis found.
Another option, placing a cap on federal spending for the expansion population, would save $225 billion — but 3.3 million people would lose Medicaid coverage. Repealing regulations that aim to reduce barriers to enrollment and simplify the renewal process would reduce the federal deficit by $162 billion over the next decade, but 2.3 million fewer people would be enrolled in Medicaid, the CBO found.
