Repeal of the Affordable Care ActPrior to being elected, Donald Trump published a contract with voters outlining what he would do during his first 100 days. One promise Trump made that has been getting a lot of attention lately and that could have significant impact on seniors and persons with disabilities is the repeal and replacement of the Affordable Care Act (“Obamacare”).
In fact, the first executive order signed by President Trump following his inauguration addressed the Affordable Care Act. In the order, relevant federal agencies to waive or defer provisions that “impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
In the explanation in his contract with voters, Trump states he will work with Congress to fully appeal Obamacare and replace it with Health Savings Accounts, the ability to purchase health insurance across state lines and let states manage Medicaid funds. Letting states manage Medicaid funds means either a Medicaid block grant, or per capita spending on Medicaid.
Medicaid Block Grants or Per Capita CapsThe per capita model would not account for changes in the costs per enrollee beyond the growth limit, which would be set below the projected rates of growth under current law. Under a block grant, states would be given a set amount of Medicaid funding based in part on the state’s current Medicaid spending, rather than setting a per enrollee cost.
While the cap could control federal spending on Medicaid and give states additional flexibility, it will also provide states with an incentive to reduce Medicaid payment rates and restrict benefits. Enrollee with high costs could be prevented from qualifying or saddled with high premiums or cost sharing that is unaffordable.
Currently, Medicaid matches what a state pays out for Medicaid benefits. A Medicaid beneficiary does have a share of cost, but it is limited to their income, less certain exclusions (and can vary with the Medicaid program that person is enrolled in). The per capita cap could allow states to charge much higher costs and in effect restrict enrollees from receiving benefits who need it the most.
The Urban Institute, which has analyzed Medicaid block grants and per capita proposals, notes in an article published by Forbes.com that such policies would reduce states’ authority to make policy decisions over their own programs while threatening benefits that low-income people often need but can’t afford. In addition, block grants would favor states with higher incomes since they spend more on Medicaid and would therefore get more money allotted by way of a larger block grant.
While per capita caps or block grants will save the federal government money, several negative consequences could occur: 1) Millions of current Medicaid enrollees will lose their benefits. 2) Millions of Medicaid applicants will be denied eligibility and will have no way to pay for care or to obtain insurance. 3) States will have increased expenses to make up the difference from funding they would have received from the federal government.
Medicaid block grants are nothing new. They have been proposed several times over the past 20+ years but never implemented. While not likely to be implemented in the first 100 days, this is an issue to watch as alternatives to Obamacare are explored and negotiated by Republican Congressional leaders and President Trump.
Confusion over Repeal of ObamacareMedia reports the last week have focused on what appears to be disparity between what President-elect Trump says about repealing Obamacare and how it will be replaced, and what Republican leaders are saying publicly. A New York Times article highlighted a recent Congressional Budget Office report that concluded 18 million could lose their health insurance within a year if Obamacare is repealed.
Trump has stated that he is working on a replacement plan. Republican leaders have stated they are working on a replacement plan. No one has published a plan yet, and it is unlikely we will see anything passed within the first 100 days of the Trump Presidency.
The next question then becomes what part of the repeal and replace process will require Congressional approval. This New York Times article breaks down each promise made in Trump’s contract to voters and designates it as needing congressional approval, may need approval, or does not need approval. While some parts of repealing Obamacare may be done through the budget reconciliation process, a full repeal and replace will require Congressional approval.
One certainty is that the next 100 days and all of 2017 are shaping up to address critical issues affecting seniors, persons with disabilities, and Veterans. Another certainty is that elder law attorneys will become even more critical in the coming months and years as new laws are passed.
ElderCounsel understands the need for attorneys to stay informed as new laws are considered and debated in Congress. We will continue following these issues closely to make sure our members stay on top of these important issues, and are well equipped to pass this information on to their clients. For more information about ElderCounsel contact us online or give us a call at 888.789.9908, option 3.