Tag Archives: ACA Repeal

Here are the hidden items in the Senate GOP’s new Obamacare repeal bill

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The Senate GOP hid the meanest things very deeply in its Obamacare repeal bill. We found them

 

Senate Republicans unveiled a new, “improved” version of their Affordable Care Act repeal bill Thursday, so the treasure hunt is on: the search for provisions so horrifically inhumane that they’ve had to be concealed deep in the measure’s legislative language and procedural maze.

We’ve found quite a few, with the help of professional spelunkers Andy Slavitt, David Anderson, Larry Levitt and others. Here are some of the provisions in the so-called Better Care Reconciliation Act, or BCRA, that the Senate GOP really doesn’t want you to know about.

—The measure kills the birth control and women’s health screening requirements. The Affordable Care Act advanced women’s healthcare rights immensely by mandating that health plans cover contraceptives, as well as a range of preventive screenings, without deductibles or co-pays. Conservatives have been trying to roll back those guarantees since the ACA’s enactment. The new Senate bill eliminates them.

That action is part of the Cruz Amendment, on which more below. It allows states to authorize the sale of health plans that don’t include the women’s health provisions. Observes Dawn Laguens of Planned Parenthood, “Insurance companies would once again be allowed to refuse to cover basic preventive healthcare, as well as charge women co-pays for birth control, immunizations and cancer screenings.” She calls this “a major step backward for women.”

—HHS Secretary Tom Price gets enormous new power over healthcare standards and even state budgets. The essence of the amended bill’s bait-and-switch structure is the creation of several slush funds to moderate the costs to states of various repeal provisions, especially the drastic cutback in Medicaidfunding.

Those slush funds, however, would come under the control of Health and Human Services Secretary Tom Price. A known enemy of Medicaid and of expanding healthcare services for women and the needy, Price would have the authority to apportion those funds as he wishes, favoring some states over others because of their politics and policies, for example.

As former Medicare/Medicaid chief Andy Slavitt observes, there are no rules or standards guiding Price’s hand — he could dole out all the money to red states or pull funding from others at will. The money doesn’t have to go to services for low-income people or to replace lost Medicaid funding. He could shortchange states that require health plans to cover abortion — such as California and New York.

“The bill is a giant ‘Trust Tom Price’ bill,” Slavitt tweeted. And even if the money is apportioned responsibly, it’s not enough: The total in the slush funds, Slavitt calculates, would restore barely 10% of the cuts in Medicaid.

—The bill still cuts taxes for the wealthy. One widely noticed change from the original Senate bill is the retention of two taxes the ACA imposes on high-income taxpayers — those earning more than $200,000, or $250,000 for couples. These are a 3.8% surcharge on capital gains and dividends and a 0.9% increase in the Medicare tax for those taxpayers. The original Senate bill would have repealed those taxes, handing over an estimated $346-billion windfall to the rich over 10 years.

But don’t cry for the wealthy just yet. The amendment expands another windfall — health savings accounts, which are tax-preferred accounts that can be used to pay for out-of-pocket medical expanses. Under the amended bill, HSAs also can be used to pay premiums, which effectively renders premiums in the individual market tax-deductible for the first time.

HSAs sound good in principle, but in practice they’re geared to higher-income taxpayers. Although some employers help their workers fund HSAs, for the most part the accounts have to be funded out of disposable income, which many middle- and working-class families may find hard to come by. A study released this month by the Employee Benefit Research Institute found that, although the maximum annual contribution is $6,750 for families and $3,450 for individuals, the average total account contribution was $2,922 in 2016.

The Tax Policy Center says that more than 16% of all households with $200,000 in income or more have HSAs — but fewer than 2% of households earning less than $30,000 do.

The Republican repeal bills would raise the maximum contributions to $6,550 for individuals and $13,100 for families — but since most families can’t even max out their HSAs now, they plainly wouldn’t be helped by this change. Rich families would be helped, however.

—The senators exempt themselves from the loss of consumer protections. A convoluted provision in the amended measure exempts Congress and its staff members from the loss of guarantees for those with preexisting conditions and other consumer protections.

You won’t find the words “Congress” and “exemption” next to each other anywhere in the bill. You have to know that “1312(d)(3)(D)” is the provision of the Affordable Care Act requiring members of Congress and their staffs to obtain coverage through the Obamacare exchanges, and then notice, on Page 167 of the Senate bill, that the elimination of consumer protections is “non-applicable” to that section.

Senate leaders say the exemption is necessary for procedural purposes, and imply that they’ll remove it in subsequent legislation. We’ll see.

—The opioid money is a Band-Aid. Opioid addiction has emerged as perhaps the worst public health crisis in the nation. As much as 40% of the cost of treatment of addicts has been covered by Medicaid. The harsh cuts in that program imposed by the Senate and House repeal bills would force more of that expense onto states that simply can’t afford it. Meanwhile, the projected loss of medical coverage by as many as 23 million Americans under repeal will keep many victims of the epidemic from finding treatment.

The cost of fighting the epidemic and treating the secondary health problems of its victims, such as HIV and hepatitis C, has been estimated at as much as $183 billion over 10 years. The original Senate measure included only a one-year, $2-billion appropriation for the purpose. The revised bill provides $45 billion over 10 years. Interestingly, that’s exactly what was requested by GOP Sens. Rob Portman of Ohio and Shelley Moore Capito of West Virginia. So the appropriation won’t be adequate as a solution to the opioid crisis, but it might be enough to bring those two potential holdouts on board.

—The “Murkowski Mollification.” The Senate bill has a craftily-worded handout for Sen. Lisa Murkowski (R-Alaska). She’s been a holdout on the Senate bill because of its massive cuts to Medicaid, an important healthcare program in her state.

The amended measure guarantees at least $1.3 billion, or 1% of a $132-billion, 10-year bailout fund, to any state where premiums are 75% higher than the national average. Only one state qualifies: Alaska.

It’s not unusual for such provisions to be buried in legislation that appears to have broader application. Indeed, the Affordable Care Act included a so-called “Cornhusker Kickback” to benefit Nebraska and secure the vote of then-Sen. Ben Nelson. In this case, the provision means Alaska, a state with 0.2% of the nation’s Medicaid enrollment, would get a disproportionate windfall. As of this writing, Murkowski hasn’t said if she’ll take the bait. But as Slavitt observes, the payoff sets the stage for demands by senators from other states.

“If I’m WV, TN, AZ, WY, I want to know where mine is,” Slavitt tweeted. In any event, the money wouldn’t be enough to cover Alaska’s losses from the Medicaid rollback, and it would still be subject to cancellation at any time by Price.

—The Cruz Amendment is a disaster for health insurance buyers. We’ve written before about the amendment crafted by Sen. Ted Cruz (R-Texas). It would effectively destroy the healthcare market nationwide.

The amendment would allow states to authorize any insurer to offer bare-bones policies as long as they also offered at least one ACA-compliant policy in that state. This opens the door to bifurcating the insurance market. Younger, healthier buyers, especially males, might sign up for cheap policies without coverage for hospitalization, substance abuse, prescriptions, maternity or preexisting conditions. That would force everyone else to buy a fully compliant plan; since such a plan would be filled with customers with potentially risky and costly conditions, its premium would soar. As it became progressively less affordable, all but the sickest buyers would leave, making it even more costly.

This is the definition of a “death spiral” that Republicans claim they want to avoid. It makes a mockery of their promise to protect people with preexisting conditions, since the cost of insurance for them would soon be stratospheric.

—Buyers of cheap Cruz plans would be locked out of the insurance market if they get sick. A little-noticed aspect of the Cruz proposal is that the cheap plans it allows would not qualify as legitimate insurance coverage under the GOP’s “continuous coverage” rules.

Those rules, embodied in both the House and Senate GOP repeal bills, guarantee coverage for preexisting conditions as long as the buyer maintains insurance coverage without a break of longer than two months. Under the Senate bill, anyone with such a lapse would face a six-month waiting period for new insurance before the preexisting condition guarantee would be effective.

That means that individuals who get sick and discover that their Cruz plan won’t cover their illness wouldn’t be able to buy full coverage for at least six months. It’s a classic bait-and-switch, but you won’t hear it being bragged about by Senate Republicans. They don’t really want you to know.

The Congressional Budget Office, which determined last month that the original Senate bill would cost 22 million Americans their insurance by 2026 compared with the current law, hasn’t weighed in on the amended version. It’s unlikely that the CBO will think much more highly of the amendments.

For that reason, Senate GOP leaders have been hinting that they’ll skip, or ignore, any CBO analysis and rely instead on one prepared by Price’s HHS. What are the chances the HHS will deliver a credible analysis? Probably nil

Health Savings Accounts Are No Substitute for the ACA’s Financial Assistance

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https://www.americanprogress.org/issues/healthcare/news/2017/07/14/435850/health-savings-accounts-no-substitute-acas-financial-assistance/

Like the House Affordable Care Act (ACA) repeal bill, the Senate’s Better Care Reconciliation Act (BCRA) would loosen a number of restrictions on health savings accounts (HSAs). HSAs are intended to allow individuals to put aside pretax dollars to cover out-of-pocket medical expenses, though in practice they are often used as tax-sheltering devices for the wealthy. A new proposal supported by Sen. Ted Cruz (R-TX) that has been added to the updated version of the BCRA would also allow enrollees to use HSA funds to pay for premiums, in addition to out-of-pocket costs.

Although conservatives generally frame HSAs as a pro-consumer measure to improve affordability, in reality these accounts primarily benefit the wealthy rather than families who have difficulty affording health care costs. In addition, since HSAs currently must be paired with high-deductible health plans, they come at the cost of greater financial risk. The BCRA would push individual market enrollees toward less generous plans with high deductibles; this tradeoff would be particularly extreme for enrollees who currently benefit from the ACA’s cost-sharing reduction subsidies (CSRs), which significantly lower cost-sharing for low-income enrollees and would be eliminated after 2019 under the BCRA.

Allowing HSA funds to go toward premium payments would fail to make up the gap between the financial assistance that lower- and middle-income people would receive under the BCRA versus the ACA. As a result, millions of Americans would still find health insurance much harder to afford under the BCRA.

Current policy on HSAs

Consumers can use money saved in an HSA to meet deductibles and other forms of cost-sharing, such as copays and coinsurance. These funds cannot be used to pay insurance premiums. Currently, people can contribute to an HSA only if their health plan has an annual deductible of at least $1,700 for individual coverage or $2,600 for family coverage. Contributions to HSAs are tax-deductible; earnings within the account and withdrawals made for qualified expenses are tax-free.

As of 2017, the maximum contribution limit for an HSA was $3,400 for individual coverage or $6,750 for family coverage.

HSAs are mostly a tax break for the wealthy

Research and tax data demonstrate that HSAs primarily benefit upper-income households, since they are more likely to use the accounts, have more money available to invest in them , and receive a greater tax benefit by using them.

U.S. Department of Treasury data show that at the end of 2014, just 5 percent of tax filers with adjusted gross income less than $100,000 held money in an HSA, while 20 percent of filers with incomes of more than $500,000 did. HSA users with incomes less than $100,000 had account balances averaging about $1,700, while HSA users with incomes greater than $500,000 had account balances averaging nearly $10,000. The low- to middle-income group contributed an average of $1,800 into their accounts that year; this average includes both direct contributions by a policy holder and those made by payroll deduction from a policy holder’s employer. The high-income group, on the other hand, contributed an average of $5,500.

Upper-income households not only use HSAs more frequently and put more money in them, but they also get a bigger tax break for using them. Since higher-income earners are in higher tax brackets than middle- and lower-income earners, they save more money for each pre-tax dollar they shelter in an HSA. For example, a couple in the highest 39.6 percent tax bracket (with taxable income of more than $470,700) saves 39.6 cents in federal income tax for each dollar they contribute to an HSA. Meanwhile, the vast majority of low- and middle-class families are in the 0 percent, 10 percent, or 15 percent income tax bracket, which means they save either nothing, 10 cents, or 15 cents, respectively, on each dollar they contribute to an HSA.

According to Treasury data, families with incomes less than $100,000 making tax-deductible HSA contributions saved an average of about $400 off their taxes. Families with incomes greater than $500,000 saved an average of more than $2,000 when they made HSA contributions—five times as much.*

Wealthy people also get a proportionately bigger tax break on the investment returns that compound within HSAs. In fact, they are able to avoid not only income or capital gains taxes on investments by sheltering their wealth in HSAs, but also the Net Investment Income Tax (NIIT)—a 3.8 percent tax on investment income paid by people with incomes greater than $200,000 (or $250,000 for couples) that was enacted in the ACA to help pay for coverage expansions. Although the House ACA repeal bill and prior versions of the Senate bill repealed the NIIT, the most recent Senate bill leaves the NIIT in place. Many Republicans, including House Speaker Paul Ryan (R-WI), have suggested that they will seek to repeal the NIIT as part of tax legislation later this year.

The Senate bill expands HSAs, in part by raising the annual contribution limits. The benefits of higher contribution limits are likely extremely skewed to the wealthy. Naturally, high-income families are much more likely to max out their contributions into an HSA because they have more money to put into them. For a family making $50,000, the current contribution limit of $6,750 is 14 percent of their income.

Consider how raising the HSA contribution limits would affect two families: First, a middle-class family earning $50,000 and contributing $1,700 into an HSA, which is about the average contribution for HSA users of that income range. And second, a millionaire household maxing out its HSA.

Assuming the middle-class family is in the 15 percent tax bracket, it would save about $250 by deducting a $1,700 contribution into its HSA. Raising the contribution limits wouldn’t change these savings, although the Senate bill expands the potential uses of HSA. Meanwhile, the millionaire family that maxes out its HSA now contributes the full $6,750, getting a tax break of $2,673. Under the Senate bill, it can contribute $13,100 to an HSA, nearly doubling its tax break to $5,188. Of course, lower- and middle-income families may contribute more to HSAs under the Senate bill—but they are less likely to be able to afford to do so, and even if they do, they would get a smaller tax break.

The bottom line is that HSAs are a tax break that is skewed to wealthy families—one that the Senate bill makes larger.

HSAs in the Senate repeal bill cannot offset less generous tax credits

Like the House bill, the Senate’s BCRA would expand the use of HSAs. It would significantly increase the contribution limits to the maximum out-of-pocket limit amounts for high-deductible health plans, which are $6,550 for individuals and $13,100 for families in 2017. The bill would also permit spouses to make catch-up contributions to the same account, along with other changes.

In addition, it would reduce the tax penalty for withdrawing HSA funds for nonmedical expenses from 20 percent to 10 percent for people younger than age 65. In other words, this would make it easier for people to use HSAs as a tax shelter and later use the funds for nonmedical expenses.

Finally, the updated BCRA would enable enrollees to use HSA funds to pay their premiums. Unlike the House bill, the BCRA would retain the ACA’s premium tax credit structure, but would cut off eligibility at 350 percent of the federal poverty level instead of 400 percent, and would make the credits less generous.

Allowing HSA funds to pay for premiums does not come close to compensating for this reduction in financial assistance for low-income Americans. As described above, the tax benefits of HSAs are upside-down: They give a much bigger tax break to upper-income households in higher tax brackets while doing little or nothing for low- and moderate-income families. Refundable premium tax credits, on the other hand, work by directly reducing consumers’ premium costs. The ACA’s premium tax credits are designed to be most generous for people with lower incomes, who may have the most difficulty affording insurance otherwise.

Not a replacement for cost-sharing reduction subsidies

One often-overlooked but essential component of the ACA is the cost-sharing reduction subsidies, which go to enrollees earning between 100 percent and 250 percent of the federal poverty level—which, in 2017, is $12,060 to $30,150 for an individual in most states—who select certain plans on the marketplace. CSRs are a crucial support to help low-income enrollees afford their cost-sharing, such as deductibles and co-pays. CSRs work by directly upgrading the insurance plan’s actuarial value, or the percent of costs that the insurance company will cover rather than the enrollee. In contrast, HSAs are currently tied to high-deductible health plans. Thus, rather than serving as a replacement for the CSRs, low-income enrollees would be required to take on increased cost-sharing in order to even qualify for an HSA, with the HSAs providing little or no tax benefit.

The BCRA would reduce the actuarial value of the individual market benchmark plan; instead of the benchmark plan covering 70 percent of enrollees’ costs, it would only cover 58 percent. CSR recipients would see an even greater drop in plan value because the BCRA would repeal the CSRs with no replacement. CSRs increase the actuarial value of plans to 94 percent, 87 percent, or 73 percent, depending on a CSR enrollee’s income.

These changes would leave low-income enrollees facing significant higher deductibles and other cost-sharing. As the Congressional Budget Office (CBO) explains, “the deductible for a plan with an actuarial value of 58 percent would be a significantly higher percentage of income. … As a result, despite being eligible for premium tax credits, few low-income people would purchase any plan.”

Illustrating this, CBO estimates that benchmark plans under the BCRA will have deductibles around $6,000. Currently, among benchmark plans under the ACA that have combined medical and prescription drug deductibles, those deductibles average $3,609. For low-income enrollees who receive the highest level of cost-sharing assistance, the CSRs reduce their deductibles to an average of $255. This means that these CSR enrollees would see their deductibles increase by more than $5,700 on average under the BCRA, a more than 2,200 percent increase. An individual who qualifies for the highest level of CSRs earns less than $18,090 per year; thus, a $6,000 deductible would represent at least one-third of their income.

Enrollees who currently benefit from CSRs aren’t the only ones who would be hit hard by this increase in deductibles. Medicaid beneficiaries who would lose eligibility due to the BCRA’s rollback of Medicaid expansion funding or per capita caps on funding would also find coverage with these types of deductibles very difficult to afford. Medicaid beneficiaries pay little to no premium costs and have very low cost-sharing; they would face sharply higher costs on private coverage under the BCRA. For example, for someone currently covered by Medicaid expansion and earning 101 percent of the federal poverty level—or $12,180—a $6,000 deductible would be about one-half of their income.

As this calculation makes clear, low-income enrollees would face significantly higher cost-sharing under the Senate bill. Moreover, as the CBO concluded, few low-income enrollees would be able to afford any health care plan at all.

Conclusion

HSAs are primarily a tax shelter for the wealthy, not a solution to help low- and middle-income people afford coverage. Combined with the elimination of cost-sharing assistance and the downgrading of the generosity of the benchmark plan, the BCRA’s HSA provisions represent a shift toward significantly higher cost-sharing. Far from providing better care, the new HSA provisions will not change the CBO’s projection that the Senate plan would price most low-income enrollees out of the insurance market entirely.

*Authors’ note: When also taking into account HSA contributions made from payroll deductions, the average total income and payroll tax savings on HSA contributions for families with incomes under $100,000 is nearly $600, compared to about $2,300 for families with incomes over $500,000.

Opposition To GOP Repeal Bill Inches Up And Intensifies

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Opposition To GOP Repeal Bill Inches Up And Intensifies

 

Public opposition to the Republican effort to replace the Affordable Care Act grew stronger this month, but a core group of Republicans remained in support, according to a poll released Friday.

Sixty-one percent of the public said this month they did not like the GOP health care effort, now undergoing a revised push in the Senate. That was a 6 percentage point increase from the Kaiser Family Foundation’s monthly tracking results in June, when 55 percent expressed unfavorable opinions. (Kaiser Health News is an editorially independent program of the foundation.)

The poll also found opposition was becoming more passionate, with more of the public viewing the plan “very” unfavorably. The Affordable Care Act maintained the support of half the populace, nearly double the 28 percent of people who backed the GOP efforts. Two of three people opposed major reductions in Medicaid that are included in the GOP plan…

Nonetheless, a majority of Republicans and supporters of President Trump continued to favor the GOP plan, which would increase the number of uninsured as it alters Medicaid and the private insurance markets that have been running since 2014. In fact, in this month’s poll more Republicans said health care is headed in the right direction than believed that in April, before the House passed its version of the health care replacement bill.

Still, most Americans said they would prefer Republicans and Democrats to work together on health care — 71 percent said they would like to see a bipartisan effort to fix the ACA.

The poll of 1,187 adults was conducted July 5 – 10, about a week after the Congressional Budget Office issued its report on the GOP draft legislation. The margin of error was plus or minus 3 points.

 

CEOs of Ascension, Dignity, Trinity, Providence, CHI to Trump, Congress: Work with us on healthcare legislation

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http://www.beckershospitalreview.com/hospital-management-administration/ceos-of-ascension-dignity-trinity-providence-chi-to-trump-congress-work-with-us-on-healthcare-legislation.html

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The leaders of five major nonprofit health systems are calling on Congress to work with them and draft healthcare legislation that encourages improved quality of care and ensures Americans maintain their insurance coverage, according to an op-ed penned in The Hill.

Anthony Tersigni, EdD, president and CEO of St. Louis-based Ascension, Kevin Lofton, CEO of Englewood, Co.-based Catholic Health Initiatives, Lloyd Dean, CEO of San Francisco-based Dignity Health, Richard Gilfillan, MD, CEO of Livonia, Mich.-based Trinity Health, and Rodney Hochman, MD, CEO and president of Renton, Wash.-based Providence St. Joseph Health all emphasized the need for Congress not to pass the Better Care Reconciliation Act as it is written and risk millions of Americans losing their health insurance.

“Together, we can fix this,” the CEOs wrote. “There is still plenty of room for improvement in our healthcare system. Healthcare is too expensive, coverage must be more affordable, Medicaid programs must become more innovative and efficient, the individual market must be stabilized and more payments for healthcare services must be made through value-based contracts.”

“…we invite the Trump administration and members of Congress to work together with us to create a health system that always puts people first and never forgets that each of us is only one disease or one accident away from vulnerability, ” wrote the group.

The CEOs’ organizations combined have a presence across 40 states and Washington, D.C.

Five key senators who will make or break healthcare reform

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Five key senators who will make or break healthcare reform

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The fate of Republican legislation to repeal and replace major parts of ObamaCare rests on a handful of senators who have strong reservations about the bill and a variety of political reasons to either support or oppose it.

Two Republicans have already said they will vote against a motion to proceed to the bill next week, giving Senate Majority Leader Mitch McConnell (R-Ky.) no margin for error.

If one more GOP senator defects, the bill will fail and party leaders will have to go back to the drawing board or altogether shelve the healthcare reform effort

The Congressional Budget Office score of the bill, expected on Monday, could tip the balance one way or the other — as could pressure from President Trump, their home-state governors, doctors and hospitals.

Sen. Dean Heller (R-Nev.)

Heller has the most on the line as the most vulnerable Republican senator up for re-election in 2018.

A survey last month of 500 registered voters in Nevada by a GOP polling firm found that a majority of Nevadans opposed the House-passed healthcare bill, which the Senate legislation is largely based on. The poll found that only a third of Nevada Republicans supported the House legislation.

Meanwhile, Republican Governor Brian Sandoval, the most popular politician in the state with a 64 percent approval rating has come out strongly against the Senate measure.

Heller appeared with Sandoval at a press conference last month to announce his opposition to the bill McConnell unveiled on June 22, telling reporters “it’s going to be very difficult to get me to a ‘yes.’”

Sandoval said Thursday that he is “greatly concerned for the 204,000” Nevadans who received health coverage under ObamaCare’s Medicaid expansion.

He also said the revised bill unveiled earlier that day “isn’t that much different from its previous iteration.”

Voting for the bill could be a major liability for Heller.

On the other hand, if he sinks it, he could still pay a price at the polls as Trump has warned Wednesday he will be “very angry” if the Senate does not pass the healthcare bill.

Running against Trump did not work for GOP candidates in Nevada last year, even though Hillary Clinton carried the state. Former Rep. Joe Heck (R-Nev.) and former Rep. Crescent Hardy (R-Nev.), who both disavowed Trump, lost races for Senate and House seats, respectively.

Sen. Lisa Murkowski (R-Alaska)

An underrated element in Murkowski’s decision making is her past relationship with McConnell and the broader Republican Party.

McConnell kicked Murkowski off his leadership team in 2010 after she lost Alaska’s Republican primary to conservative candidate Joe Miller.

McConnell at the time urged Murkowski to accept the result of the primary and “move on.” He also made a $5,000 donation to Miller’s campaign.

Murkowski nevertheless won the general election as a write-in candidate by relying on independent and cross-over Democratic votes.

The Senate healthcare bill is particularly unpopular with independents and Democrats and its reductions in healthcare subsidies and Medicaid would hit Alaska’s rural population and expensive insurance markets especially hard.

The Center for Budget and Policy Priorities, a liberal-leaning think tank, concluded this month that the first version of the Senate healthcare bill would reduce tax credits more deeply for Alaskans than people in any other state.

The revised version unveiled Thursday includes a new provision that could allocate more than $1 billion over the next decade to Alaska to reduce the cost of insurance premiums.

Murkowski applauded the inclusion of the language Thursday but declined to say whether she would vote to advance the bill next week.

She has criticized the legislation for setting a lower formula for indexing Medicaid for inflation starting in 2025, arguing it has gone beyond the stated mission of repealing and replacing parts of ObamaCare.

“Let’s leave Medicaid off the table for right now. Let’s bifurcate this,” she told reporters Wednesday.  “This is not something that in my view is best done in a reconciliation process.”

Moderate Rep. Susan Collins (R-Maine), who has pledged to oppose the motion to proceed to the bill, made a similar argument against changing funding for traditional Medicaid beneficiaries, noting that ObamaCare “did not rewrite the entitlement program.”

Sen. Mike Lee (R-Utah)

Lee partnered with Sen. Ted Cruz (R-Texas) in pushing an amendment to allow insurance companies to sell any health plans of their choosing as long as they offer at least one that meets ObamaCare’s regulatory requirements.

Cruz announced Thursday he would support the Senate bill after negotiating a side deal with the leadership to amend the Cruz-Lee Consumer Freedom option — but he left Lee out of the talks.

Lee tweeted Thursday morning that the language added to the bill was “based” on the Cruz-Lee amendment but is not the same thing and is so far undecided on how to vote.

It will be tougher for Lee to vote to block the legislation now that two of his fellow conservatives, Cruz and Sen. Ron Johnson (R-Wis.), have flipped from opposing the legislation to now supporting a motion to begin debate.

Cruz agreed to modify the amendment by fusing the risk pools of people who buy cheaper plans subject to less federal regulation and those who purchase costlier federally qualified plans.

Lee has held firmly to the position that the costs of plans for people with pre-existing conditions should not be kept low, something that requires healthy people to bear more financial burden. In private meetings he explicitly objected to ObamaCare’s so-called community rating requirement, which keeps plans affordable to people with pre-existing conditions.

Whether he buys into the compromise Cruz struck with leaders could depend on what the CBO says of its impact on premiums.

Some lawmakers raised questions on Thursday about whether the CBO would provide an analysis for the Cruz amendment before the vote on the motion to proceed. Sen. Bill Cassidy (R-La.), however, who has been active in the internal talks, said he was assured that senators would get a CBO score on the Cruz provision before the vote.

Shelley Moore Capito (R-W.Va.)

Capito’s home state has a lot riding on the proposed Medicaid reforms.

Twenty-nine percent of West Virginia’s population is on Medicaid, making it the state with the highest share of its population relying on the program, according to the Kaiser Family Foundation.

More than a third of the state’s total enrollees, 180,500 adults out of 564,000 people, signed up under ObamaCare’s expanded enrollment.

A poll conducted for the American Medical Association last month found that only 19 percent of 400 West Virginia voters surveyed approved of the House-passed healthcare bill while 42 percent disapproved.

The Senate bill adopts a less generous formula for indexing Medicaid to inflation starting in 2025 by pegging it to inflation for urban consumers instead of medical inflation, which grows at a faster rate.

Capito told reporters Thursday that the CBO score will factor heavily in her decision.

Capito has a closer relationship with McConnell than some of the other GOP holdouts. She serves on his leadership team as counsel.

Sen. Rob Portman (R-Ohio)

Portman has historically had a close relationship with McConnell but things are getting tense between the two men because of the healthcare debate.

McConnell and Portman clashed at a leadership meeting last month when McConnell pointedly reminded his colleague that he supported entitlement reform when serving as budget director for former President George W. Bush.

Portman easily won re-election last year in a swing state that was expected to be closely contested but that Trump carried by 8 points.

But Portman is feeling pressure from Ohio Gov. John Kasich (R), who came out against the Senate bill Friday, calling it “unacceptable” and its Medicaid cuts “too deep.”

Portman, however, is not as closely aligned with Kasich as Heller is with Sandoval in Nevada.

From early on in the negotiations, Senate Republicans suspected Kasich was trying to blow up the negotiations because of his own political aims.

Nearly 700,000 people gained healthcare coverage in Ohio under Obama’s Medicaid expansion.

Portman has long argued for a longer glide path for phasing out generous federal funding for expanded enrollment and expressed concerns about the less generous inflation rate.

He was given a big concession in the revised bill when McConnell included an $45 billion in the revised bill to cover people addicted to opioids, an epidemic in Ohio.

Insurers shred Senate health care bill: “Premiums will skyrocket for preexisting conditions”

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https://www.vox.com/policy-and-politics/2017/7/15/15976244/senate-health-care-bill-health-insurance-companies-letter

Health insurance companies have largely bit their tongues about the Senate health care plan, but they are turning against it now, warning that a recent revision would send premiums skyrocketing for people with high medical costs.

The insurance industry has been one of the few health care sectors to even tentatively embrace the Senate’s plan, as Vox has documented, but that has changed in the last few days. Their most influential representatives in Washington — America’s Health Insurance Plans and the Blue Cross Blue Shield Association — sent a letter to Senate leaders Friday urging them to remove Sen. Ted Cruz’s amendment from the legislation.

The Cruz amendment, added in the revised Senate plan, would allow health plans to sell insurance on the individual marketplaces that does not comply with Obamacare’s insurance regulations as long as they also sold plans that did comply. Outside experts have warned this would segment the market, with healthy people buying skimpier non-Obamacare coverage and sicker people buying more robust Obamacare plans.

That would then send costs, and in turn premiums, spiraling upward in the Obamacare market, the insurance trade associations warned in their letter. They noted particularly that middle-class families who do not qualify for financial assistance would not be shielded at all from those increasing premiums.

“As healthy people move to the less-regulated plans, those with significant medical needs will have no choice but to stay in the comprehensive plans, and premiums will skyrocket for people with preexisting conditions,” the groups said.

The Senate does include $70 billion to offset increased costs under the Cruz amendment. But that money does not appear to be enough to assuage the insurance industry’s concerns.

“Finally, this provision will lead to far fewer, if any, coverage options for consumers who purchase their plan in the individual market,” the groups said. “As a result, millions of more individuals will become uninsured.”

It is unclear whether the Cruz amendment will be evaluated as part of the Congressional Budget Office score of the Senate bill to be released this coming week. A source familiar with the situation told me that the US Department of Health and Human Services office of planning and evaluation has been asked to review the proposal and its cost and coverage implications.

The insurance groups urged Senate Republicans leaders to remove the Cruz provision from the legislation.

Dave Dillion, an expert with the Society of Actuaries, told me Friday that part of the insurance industry’s objections is likely the uncertainty that the Cruz plan would introduce to the insurance market.

“I think while obviously a lot of carriers have not been enthralled with [Obamacare], you get comfortably number, you know the rules, and you go on about your business,” he said, adding of the Cruz proposal: “There’s so much uncertainty about what it really means. It’s not black and white.”

McCain to miss week, likely delaying healthcare vote

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http://thehill.com/homenews/senate/342197-mccain-recovery-from-medical-procedure-could-doom-healthcare-repeal-vote

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Sen. John McCain (R-Ariz.) will miss this week’s votes in the Senate after undergoing surgery on Friday, depriving Republicans of a key vote on healthcare.

McCain’s absence means Senate Republicans almost certainly will not have the 50 votes they’d need to win a procedural vote.

Sens. Rand Paul (R-Ky.) and Susan Collins (R-Maine) have already said they would oppose the procedural vote. With all Democrats voting no, that would leave Republicans with just 49 votes, given McCain’s absence.A further delay in the schedule is bad news for Senate Republicans, as it will allow opponents of the legislation more time to pressure wavering GOP centrists to vote against it.

Even with McCain, it is uncertain whether Senate Majority Leader Mitch McConnell (R-Ky.) could put the 50 votes together for the bill.

An analysis and score of the Senate GOP’s new healthcare bill from the Congressional Budget Office is expected on Monday.

Centrist GOP Sens. Rob Portman (Ohio), Shelly Moore Capito (W.Va.), Lisa Murkowski (Alaska) and Dean Heller (Nev.) are among the swing votes.

Portman and Heller also face pressure from Republican governors in their states who are worried the Senate bill’s curtailing of federal support for ObamaCare’s Medicaid expansion could hurt their constituents.

McCain’s office in a statement said he is doing well after undergoing surgery to remove a blood clot from his eye on Friday.

“Senator McCain received excellent treatment at Mayo Clinic Hospital in Phoenix, and appreciates the tremendous professionalism and care by its doctors and staff. He is in good spirits and recovering comfortably at home with his family. On the advice of his doctors, Senator McCain will be recovering in Arizona next week,” the statement said.

Senate Majority Leader Mitch McConnell (R-Ky.) announced this week he was extending the Senate’s sessions for two weeks, cutting the August recess short. That could give his conference more time to get healthcare done.

McCain, 80, had the procedure done at the Mayo Clinic Hospital in Phoenix following an annual physical.

“Surgeons successfully removed the 5-cm blood clot during a minimally invasive craniotomy with an eyebrow incision. Tissue pathology reports are pending within the next several days,” the statement from the Mayo Clinic read.

“The Senator is resting comfortably at home and is in good condition. His Mayo Clinic doctors report that the surgery went ‘very well’ and he is in good spirits. Once the pathology information is available, further care will be discussed between doctors and the family,” the statement said.

Medicaid And The Latest Version Of The BCRA: Massive Federal Funding Losses Remain

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http://healthaffairs.org/blog/2017/07/14/medicaid-and-the-latest-version-of-the-bcra-massive-federal-funding-losses-remain/

Washington, DC at the Capitol Building

Where Medicaid is concerned, the most notable thing about the latest version of the Better Care Reconciliation Act (BCRA) is that despite the drama of the past two weeks—the flood of news coverage regarding the potential impact of the losses; mounting concerns raised by Senators from expansion and non-expansion states alike; and the massive outcry from hospitals, physicians, insurers, and health care organizations—the new iteration leaves untouched the fundamental Medicaid contours of the earlier version.

The new draft retains the federal funding bar for Planned Parenthood (§ 123) as well as the earlier version’s limit on states’ ability to fund their programs through lawful, broad-based provider taxes (§ 131). The new bill does virtually nothing to lessen the financial losses to states that will flow from the prior iteration. According to the Congressional Budget Office (CBO), these losses would surpass $770 billion over 10 years as a result of provisions that eliminate the enhanced funding for the adult expansion population and superimpose flat annual growth restrictions on Medicaid’s historic federal funding formula (§124 and §132).

By 2036, CBO reports, federal Medicaid funding would be about 35 percent below current law, a catastrophe of epic proportions. According to one study that sought to translate BCRA’s Medicaid provisions into state-by-state loss estimates, California alone would lose between $37 and $52 billionbetween 2020 and 2027, depending on how the cap’s arbitrary growth limits play out over time. Indeed, depending on how the cap, which is tied to a general economic inflation rate that cannot be known with certainty, plays out against actual state spending needs—triggered by everything from new vaccines to long-term services and supports to address the opioid crisis or the consequences of Zika—the federal funding losses could grow from catastrophic to unimaginable.

Small Crumbs Of Money

Perhaps Congressional leaders have sought to convince their colleagues to disregard the CBO estimates and these studies, arguing that Congress, in fact, will never allow the bottom to fall out on states and will come through with additional funding. But the newest version of the bill underscores the fundamentally meaningless nature of such assurances.

Small crumbs of Medicaid give-backs can be found at various places in the new version. One that might be thought of as the Louisiana Purchase is designed to help one state cope with massive loss; over the long term, however, the adjustment washes out in the far larger picture of declining federal funding for an exceptionally poor state.

For purposes of setting the arbitrary growth limits over time, the original bill relied on per capita spending data from the 2014-2015 time period. The new draft would allow a late-expanding state (i.e., Louisiana) to use 2016 as its base period (§ 132). But regardless of whether it is tied to 2014-2015 or 2016, nothing can mask the fact that the base period is part of a growth formula unrelated to the real world of Medicaid spending. All state programs will be tied to the distant past where federal Medicaid funding is concerned.

Furthermore, the new version does not exempt the state from the bill’s exceptionally clumsy rate-setting procedures, which lack adjustments for volume and intensity or new technology and that allow the Health and Human Services (HHS) Secretary’s power to unilaterally alter what he considers to be unreliable state data. The measure continues to permit the Secretary to claw back what he determines to be “excessive” funding by reducing later payments without a prior hearing; in the event of state evidence of underpayment, the Secretary can withhold federal funds owed until a lengthy appeals system is exhausted.

As was the case with the prior version, the new draft tips its hat toward non-expansion states, further sweetening the pot by tweaking the disproportionate share hospital payment formula in ways that favor payments to states with the highest uninsured populations (§ 126, Restoring Fairness in DSH Allotments). Like its predecessor, the new version thus rewards states that have refused to insure their poorest residents and harshly penalizes struggling hospitals serving the remaining uninsured in those that have.

As an additional lure, the new version expands the block grant option in the earlier measure to enable states to use block grants for the ACA expansion population as well as for traditional low-income adults (§ 133). Like the earlier version, state block grant funding would remain virtually frozen, leaving states increasingly on the hook for care for millions of grievously under-funded adults.

The Illusion Of A Public Health Emergency Exemption To The Per Capita Cap

One of Medicaid’s most important dimensions is its irreplaceable role in addressing the immediate and long-term effects of public health crises. Medicaid is by far the nation’s biggest single source of health care financing for dealing with critical public health threats. These threats may begin with an initial, recognized period of a formally declared emergency. They then can morph into events with very long-term effects felt for years or decades after. This was the case with the World Trade Center attacks, which led to an immediate surge in health care spending, followed by years of elevated spending to address the long-term health fallout triggered by the emergency itself. One need think only about Zika or the opioid crisis now gripping the nation to understand the near-term/long-term nature of public health threats.

Medicaid enrollees are disproportionately likely to live in poor communities, and poor communities are disproportionately likely to face public health threats ranging from environmental hazards to infectious disease. These communities also are inherently less likely to have fewer resources to cope with the effects of an emergency. Thus, a program such as Medicaid is crucial in its ability to deploy health care financing resources to the hardest-hit populations. Indeed, two thirds of all Louisiana Medicaid beneficiaries lived in the parishes affected by Hurricane Katrina.

Section 319 of the Public Health Service Act authorizes the HHS Secretary to declare the existence of a public health emergency arising from events such as a “disease or disorder,” “significant outbreaks of infectious diseases or bioterrorist attacks,” or other events identified as public health emergencies by the HHS Secretary. Whether to declare an emergency is entrusted to the Secretary’s judgment, and during the immediate emergency period, the Secretary enjoys expanded powers to deploy resources to designated populations or geographic areas. These special powers end when the declared emergency period ends. In the aftermath, states and local communities effectively are on their own, relying on the resources they have.

In and of itself, a loss of federal health funding as large as that imposed by BCRA elevates the threat risk. This risk grows exponentially when a true crisis hits, if Medicaid is crippled in its ability to provide a large-scale surge in public health care spending both during the emergency and thereafter. To understand how little the revised bill does to mitigate the crippling impact of the initial draft one need only look carefully at what the revisions would do when a true emergency strikes.

The press release accompanying the new draft states that “if a public health emergency is declared, state medical assistance expenditures in a particular part of the state will not be counted toward the per capita caps or block grant allocations for the declared period of the emergency.” But a close read of the actual bill text reveals its fundamental inadequacy.

First, the period of exemption lasts only five years, from January 1, 2020 through December 31, 2024. Emergencies happening after this date won’t qualify for the spending adjustment. Second, the bill provides no additional federal spending during the period of a declared emergency. The draft simply allows states to eventually qualify for additional federal funding in the years following the emergency if they can prove to the Secretary that their spending on the affected population went up compared to prior years and then only for immediate emergency costs. What state will have the money in advance? And what state will be able to take a chance on spending more given the purely speculative nature of whether an emergency will be declared and emergency expenditures recognized?

Third, states would receive no additional funding ever unless the HHS Secretary actually declares an emergency in the affected portion of the state or for the state’s affected populations. Many public health threats may not rise to a level that triggers a formal Secretarial determination, and the Secretary may be inclined not to make such a determination because of other, spillover effects that come with such a determination, such as the elevated demand for other types of resources.

Fourth, the additional amount of federal funding made available would be limited to the difference between what the state spent on the population in connection with the emergency and the state’s previous expenditures for the same population. Expenditures to cope with the emergency aftermath would not count, and of course these expenditures likely would not occur simultaneously with the emergency expenditures. For example, Zika has triggered emergency expenditures aimed at preventing the spread of the virus, but the true costs of Zika will roll out slowly in the form of babies left permanently and severely disabled by the virus.

And here is where the public health implications of BCRA become clear: other than exempting state expenditures on children classified as disabled from the caps, the revised bill, like its predecessor, makes no adjustment for long-term consequences. To be sure, as just mentioned, BCRA does exempt state expenditures on severely disabled children from the federal cap. But because the vast majority of children qualify for Medicaid based on poverty, this type of cramped classification system for measuring exemptions is sure to exclude spending for millions of children in severely compromised health from the exemption process.

Fifth, the bill allows only $5 billion in the aggregate for all additional federal funding over the five-year time period covered by the emergency exemption. In other words, the bill essentially creates a five-year, $5 billion mini-block grant to help all states address Medicaid spending for all emergencies occurring during this time period. The incredibly small size of the block grant alone would be likely to incentivize the HHS Secretary to avoid declaring emergencies out of concern that the money won’t be there to cover them.

In the end, the newest iteration of BCRA does nothing to alleviate the catastrophic effects of its predecessor: the difference in magnitude between what Medicaid can do today and what it will be capable of doing in the future is incalculable.

ACA Round-Up: Medicare Trustees Report Does Not Trigger IPAB, And More

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http://healthaffairs.org/blog/2017/07/14/aca-round-up-medicare-trustees-report-does-not-trigger-ipab-and-more/

Click to access TR2017.pdf

All eyes yesterday were focused on the Senate, which released significant new amendments to the Better Care Reconciliation Act. But the Senate was not the only game in town.

On July 13 the Medicare Trustees released their 2017 Medicare Trust Fund report. One of the most controversial creations of the ACA was the Independent Payment Advisory Board (IPAB). The ACA established specific target growth rates for Medicare and charged the IPAB with ensuring that Medicare expenditures stayed within these limits.

Each year the CMS Chief Actuary must make a determination as to whether the projected average Medicare growth rate for the 5-year period ending 2 years later will exceed the target growth rate. For each year since the provision went into effect in 2013, the CMS Chief Actuary has determined that the projected growth rates will not exceed these limits. It was thought that this year might be different, but for 2017 the Chief Actuary again concluded that the growth rate will not be exceeded, and said so in a letter to CMS.

The IPAB was supposed to be a 15-member board of experts that would, for years when Medicare growth rates were projected to exceed the threshold, make recommendations for cutting costs. These would be implemented unless Congress enacted an alternate approach that would achieve the same savings or waived the requirement to cut costs by a three-fifths majority. The IPAB has never been created, but under the ACA, in the absence of an IPAB its power to make program cuts devolves to the HHS Secretary.

The IPAB is deeply disliked in Congress and proposals to abolish it have wide support. But the IPAB statute seems to say that the IPAB can only be abolished by a joint resolution of Congress which must be introduced into Congress by February 1, 2017 and be enacted, following very specific procedures, by August 15, 2017.  In fact, one bill to abolish the IPAB was introduced into the Senate by February 1 with 36 Republican co-sponsors, and another with 12 Democratic co-sponsors, while a House bill was introduced on February 3 with 233 Democratic and Republican cosponsors. But August 15 is coming up quickly and Congress seems to have its hands full with other issues. Moreover, the CBO would likely view elimination of the IPAB as coming with a high price tag.

It may not matter much. The IPAB provision recognizes that Congress can always change its mind.  It could presumably change its rules to allow it to abolish the IPAB whenever it chose to do so. In fact, the rules that the House adopted for the 115th session provide that any IPAB submittals are not to be considered during the 2017-2018 session. But if Congress chose to proceed according to the ACA’s provisions, the IPAB would find few defenders.

Federal Exchange Eligibility Redeterminations And Re-Enrollment

CMS released on July 13 a guidance describing how it intends to handle eligibility redeterminations and re-enrollment for federal exchange enrollees for 2018. Basically, CMS intends to use the same procedures it used for redeterminations and reenrollment for 2017, which in turn were similar to those used for 2016.  The exchange will continue to auto-reenroll enrollees who fail to select a plan, and to terminate enrollees who have been auto-reenrolled more than once without contact with the exchange.

There is one change for 2018: CMS will discontinue advance premium tax credits (APTC) and cost-sharing reduction (CSR) payments not just for enrollees who received APTC or CSRs and did not file a tax return in a prior year in which they received ATPC or CSRs, as CMS did in 2016, but additionally for enrollees who failed to file form 8962 to reconcile the APTC they received and the premium tax credits to which they were entitled, and failed to contact the exchange and obtain an updated eligibility determination for 2018. Filing a tax return and reconciling APTC with premium tax credits is an eligibility requirement for receiving APTC and CSRs in subsequent years, but federal regulations prohibit termination of coverage for this reason unless direct notice is sent to the enrollee that coverage will be terminated for failure to file. Until now, CMS has not been able to provide the required notice for those who fail to reconcile.

GAO Finds Tax Credit Verification Procedures Wanting

Finally, on July 13, 2017, the Government Accountability Office released a report on Improvements Needed in CMS and IRS Controls over Health Insurance Premium Tax Credits. The report is long and detailed and reviews comprehensively the controls that CMS and the IRS have in place—or, more often, do not have in place—for ensuring that improper premium tax credits are not made.

The GAO scored both agencies for failing to provide accurate assessments of improper payments. It also criticized each agency for failing to have procedures in place for verifying most eligibility requirements for premium tax credits and for identifying and correcting errors in premium tax credit reporting and collecting overpayments. The agencies responded that they are working on improving verification and processing procedures, but that that they have limited resources and verification is not always possible.

In the end, a tax-based system for paying for health insurance that depends on accurate reporting and verification of citizenship or lawful alien status, incarceration status, income, residence, health insurance premiums, household composition, availability of alternative forms of coverage, and tax filing status of applicants and enrollees—and requires coordination of two independent federal agencies—is very difficult to administer. If the Senate’s BCRA is adopted, administration of the program will only become more complicated, as all of these factors remain relevant and to them will be added age and the possibility of new forms of coverage that do not qualify for premium tax credits, but can be paid for using tax-subsidized health savings accounts. The GAO has its future work cut out for it in any event.

In Senate Health Care Bill, A Few Hidden Surprises

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http://healthaffairs.org/blog/2017/07/13/in-senate-health-care-bill-a-few-hidden-surprises/

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A low-income person, eligible for Medicaid but not enrolled, is hit by a car or a bullet. Gravely injured, she arrives at the hospital unconscious. Thanks to expert, intensive care that lasts for days or weeks, she gradually recovers. Eventually, her health improves to the point where she can complete the paperwork needed to apply for Medicaid.

Such a hospital can be paid today, thanks to Medicaid’s “retroactive eligibility.” Even if the combination of medical problems and bureaucratic delays prevents an application from being filed and completed for several months, Medicaid will cover the care if the patient was eligible when services were provided.

The newest version of the Senate health bill—the Better Care and Reconciliation Act, or BCRA—would end this longstanding feature of the Medicaid program for beneficiaries who are neither elderly nor people with disabilities. If services are received in one calendar month and the application is completed the following month, the hospital would be denied all payment, even if the patient was eligible and the services were both essential and costly.

It does not matter if the state is led by a governor who understands the devastating impact of this change on hospital infrastructure, especially in rural areas where many hospitals are hanging on by a thread. Today, states have the flexibility to seek waivers that limit retroactive eligibility. Under the BCRA, that flexibility would disappear, as states are forced to end retroactive coverage, whether they like it or not.

Almost certainly, this provision would come as a surprise to most senators who are being asked to support the BCRA. It is only one of many unpleasant surprises lurking largely undiscovered throughout the bill. Following are other selected examples.

A Massive Expansion In Federal Power Over State Budgets

The BCRA grants the federal government startling new power over state Medicaid programs and state budgets. Federal dollars per person would be capped, based on state data about prior spending. But in setting the initial cap for each state, the secretary of Health and Human Services (HHS) could change the amount to rectify what the secretary views as problems in the “quality” of state data. In later years, many states could have their caps adjusted up or down by as much as 2 percent per year. That may sound like a small number, but when applied to billions of federal Medicaid dollars going to a state, it could make or break a state’s entire budget. Medicaid costs triggered by a public health emergency are exempt from the cap, but only if “the Secretary determines that such an exemption would be appropriate.” No statutory limits bound the Secretary’s use of this decision-making authority, which can have an extraordinary fiscal impact on states experiencing an epidemic or other public health crisis.

These provisions would give HHS remarkable new leverage over states, which current or future administrations could use to compel state policy changes in any desired direction. The aggressive use of available leverage has been an unfortunate feature of past administrations’ relationships to state Medicaid programs, but it could become substantially more pronounced with the increased federal authority granted by the Senate bill.

Adding To Uncertainties Surrounding State Expenditures

One recurring theme in Medicaid’s history involves state efforts to claim federal matching funds without spending the requisite state dollars. The Senate bill appears to increase this risk. Under Section 207 in the Senate bill, new opportunities emerge for states desperate to counteract the loss of billions of federal dollars. The bill authorizes unprecedented waivers involving federal funding for tax credits that help consumers buy private health insurance. So long as officials complete a form explaining how the waiver’s replacement of federal safeguards would provide an “alternative means” of increasing “access to comprehensive coverage, reducing average premiums, and increasing enrollment,” a state arguably could convert some or all of this federal money into so-called “pass-through” funds that can be used for purposes unrelated to health care. Unlike the Senate bill’s new public health emergency provisions, which require federal audits of state expenditures, states’ use of pass-through dollars has no statutory audit requirement. A state could convert subsidies meant for health insurance to other uses, or simply use the money to close a budget shortfall. As the Congressional Budget Office (CBO) explained about the virtually identical prior version of this section, the Senate health care bill would “substantially reduce the number of people insured” if states “reduced subsidies, received pass-through funds, and used those funds for purposes other than health insurance coverage.”

Medicaid Treatment For Mental Health And Substance Use Disorders

The bill repeals the current requirement that Medicaid programs must cover all “essential health benefits,” including treatment of mental health and substance use disorders. CBO found that, as the per capita limits in the Senate bill grow progressively tighter, federal Medicaid funding would eventually decline by more than a third, compared to current law. States facing such an enormous drop in federal support may see themselves as having no alternative but to cut services classified as optional, which the Senate bill redefines to include mental health and substance abuse treatment.

A Disordered Process

These problems could have been averted had the legislative process followed regular order, with hearings, legislative staff explaining the bill’s provisions, expert testimony, a public markup, and opportunities to address policy and drafting anomalies. Embedded in a measure with underlying policy goals that the authors of this blog post find fundamentally questionable, the picture that emerges is extraordinarily troubling—a legislative effort to divert more than a trillion dollars away from health care for people who are sicker, poorer, older, and indigent, while leaving states with such massive funding deficits and federal leverage that some states may attempt to stem their losses in ways that harm their vulnerable residents even more.

Even people sympathetic to the bill’s core aims, however, have good reason to oppose the Senate making such consequential decisions without taking the elementary legislative steps needed to detect and avoid terrible mistakes. Continuing to shun all the protections of regular order, the Senate appears poised to act on a bill that almost certainly includes additional unpleasant surprises going beyond those discussed here. With legislation that governs one-sixth of the US economy and that directly affects the health and economic security of millions of constituents, Senators are being asked to vote largely in the dark.