By skyforbes 
Earlier this year at the National Association of Counties Legislative Conference, the Health Policy Committee I sit on proposed and passed a resolution in strong opposition to repeal of the Affordable Care Act (ACA or Obamacare) and to block-granting Medicaid. The resolution was just reaffirmed by the full body at our annual conference.
Unfortunately, the Senate appears poised to take action Tuesday on some version of a bill that does exactly that.
So why do we counties care so much about this bill?
Nationally, counties operate more than 1900 local public health departments, 1000 hospitals, 900 nursing homes, and 750 behavioral health centers. We’ve seen where the promises of Obamacare have borne fruit, and where it falls short. We stand ready to work with Congress on improvements to make it work better, but also know what reversing course would mean for the people we care for, and for our budgets.
Protecting the federal, state, local Medicaid partnership
When we talk about Medicaid there are actually two components you need to know about. The core program that has existed for decades which serves pregnant women, babies, the disabled, and elderly. Passage of Obamacare also expanded eligibility to serve the poor (people earning up to 133 percent of the federal poverty level). Some states refused to expand Medicaid which reduced the number of people who gained coverage under the act.
As it turns out, expanding Medicaid had the largest impact on reducing the number of Americans who had health coverage. Other than employer-based programs, Medicaid is now the country’s largest source of health insurance.
Both the House and the Senate bill make dramatic cuts to Medicaid, rolling back expanded eligibility under Obamacare completely, and cap funding through a process similar to block grants. This would be a significant shift of responsibility to state and county governments which are still struggling to balance budgets 7 years into recovery from the Great Recession.
Cuts to Medicaid are actually the largest fiscal impact in both the House and the Senate versions of the bill balancing out tax cuts for high income earners.
The block grants would be based on a per capita formulation ignoring local demographics and economic conditions. Perversely, areas with disproportionately high number of eligible enrollees will, be forced to narrow eligibility criteria, reducing access to the very people Medicaid is intended to serve.
I want to be very clear about who we’re talking about. 9% of Medicaid enrollments are elderly, 14% are disabled, 34% are other adults, 43% are children. However, 21% of Medicaid spending is on elderly, 40% for the disabled, 19% for other adults, 19% for children. In other words, it’s a safety net for mothers and babies, but a primary provider of long term care for the elderly and disabled.
Medicaid is also an extremely lean program. Reimbursements are so low that in most cases, it doesn’t fully cover cost. As a result, Medicaid essentially replaces uncompensated care, but it’s not like other insurance networks that could further negotiate reimbursements downward.
In fact, should this bill pass, we can expect:
- Accelerated hospital and clinic closures in rural areas. In the last 2 years 120 rural hospitals have closed with another 693 consider “at-risk.” Both are highly concentrated in non-expansion states.
- Increased insurance rates for the rest of us. Rather than accept huge losses, providers can negotiate higher reimbursements from insurers which then pass that cost along in the form of premiums.
- Increased state taxes. Most states pay for their share of Medicaid with health provider taxes. However, the legislation actually reduces the amount of provider tax that can be raised. States would need to use general taxes to replace that funding.
More locally, Washington is undergoing a transformation of its Medicaid system, integrating both the administration and service delivery into one unified system. Currently the system divides behavioral and physical health resulting in siloes and uncoordinated care. The effort is also designed to address other social determinants of health outside of medical care and is bringing in a number of outside agencies and services to treat the whole person.
Passage of the bill would put Washington’s Medicaid Transformation project in jeopardy.
Medicaid is only one aspect of the current proposals that we find troubling. In the coming days I’ll have more on the bills’ impact to behavioral health, long term care, public health, and more.