The Basis For Compromise On Medicaid Reform And Expansion

The House-passed health care bill—known as the American Health Care Act (AHCA)— includes the most far-reaching changes in Medicaid financing since the program was enacted in 1965. The legislation would roll back the Affordable Care Act’s (ACA) substantial federal support for expanding program eligibility, and it would impose an upper limit on per-enrollee federal Medicaid spending in future years. The Congressional Budget Office (CBO) estimates that the AHCA would reduce federal expenditures on Medicaid by $834 billion over the next decade. Medicaid enrollment would fall by 14 million people in 2026. CBO predicts that the number of uninsured would increase by 23 million people in 2026 compared to current law, due largely to the reduction in Medicaid enrollment. Federal payments for Medicaid amounted to $344 billion in 2015, or almost two-thirds of the total cost of the program. Those payments are made through matching grants that pay a substantial percentage of each state’s payment for medical services. That system discourages state efforts to make Medicaid more efficient because the state only keeps a small portion of every dollar saved. By limiting federal payments on a per-enrollee basis, the AHCA payment reform aims to restore the incentive for spending discipline at the state level while ensuring that states are protected if Medicaid rolls increase. The legislation would also cut the additional funding to the 31 states plus the District of Columbia that e...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Following the ACA Insurance and Coverage Medicaid and CHIP ACA repeal and replace AHCA Medicaid expansion Source Type: blogs