Possible federal funding cuts jeopardize care
by Cara C. Bachenheimer
July 11, 2017

Health care is undoubtedly the big focus in Washington D.C. and on Capitol Hill this year.

Congressional Republicans are lurching forward with plans to “repeal and replace” the Affordable Care Act (ACA), aiming to significantly dismantle the health care law that President Obama signed into law in 2010. One of the most significant issues that could impact people with disabilities relying on complex rehab technology (CRT), home medical equipment (HME) and other homecare services is the Republicans’ proposal to make dramatic changes to Medicaid programs across the country.

On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA/HR 1628). Since then, the Congressional Budget Office (CBO) has estimated that 23 million people would lose coverage under that bill, with the largest savings coming from reductions in federal outlays for the state Medicaid programs.

The House-passed AHCA would dramatically change the financing mechanism of Medicaid. It would also end the Medicaid expansion that the ACA established. Under current law, the federal government must pay a set percentage of each state’s Medicaid costs according to the state’s designated rate. In contrast, under the AHCA’s Medicaid per-capita caps, starting in FY 2020, the federal government would pay a limited amount per person, and those payments would grow each year by a set inflation rate. The AHCA set the annual growth factor for most groups on Medicaid at the medial consumer price index, with a one percentage point increase in the annual growth factor for the aged and disabled populations.

CBO has estimated that the House Medicaid revamp would cut federal Medicaid funding by more than $880 billion over 10 years—which equates to a 25 percent funding cut during the next 10 years. This would mean that the burden of funding special needs and other health care programs would shift further onto the states. Thus, each program under the states’ Medicaid programs would face intense competition for more limited funding.

The Homecare Industry Should Be Concerned

Medicaid provides health care items and services to many consumers, particularly those with disabilities, who require various homecare services, including CRT and HME.

While state Medicaid programs vary in coverage, they all provide items and services to the 10 million Medicaid enrollees living with disabilities. The severe reduction in federal funding that would occur under a block grant system would force states to cut services and eligibility, placing the health and well-being of many people with disabilities at significant risk.

Reduced federal funding will likely also lead to reductions in programs that are optional for states to provide, but critical to people with disabilities, such as Home and Community-Based Services.

Many organizations representing people with disabilities have been lobbying loud and hard against the House-passed AHCA. But it’s not just the disability community that has expressed strong opposition to the bill. The national associations representing physicians (American Medical Association), hospitals (American Hospital Association) and seniors (AARP) are just a few of the powerful constituencies that have issued statements opposing the AHCA due to the negative impacts on patient populations.

The action is now focused on the Senate. At press time, Senate Republican leadership had just released the health care bill details. Overall, it appears to be somewhat similar to the House version, with some detailed differences in how Medicaid is treated. The Senate bill includes deep cuts to Medicaid and fundamentally reshapes that program from an open-ended government commitment to a system of capped federal payments that limit federal spending.

Many Senate Republicans are debating how to ameliorate the impact, and find alternate solutions to ensure their states get fair treatment under a Medicaid program per-capita caps system. These moderate Senate Republicans have expressed serious concerns with the details of the Medicaid payment reductions in the AHCA.

The numbers in the Senate are critically important. Republicans, who hold just a 52-48 majority, plan to pass the Senate bill under the process called reconciliation, which allows bills to pass in the Senate with a simple majority of 51, instead of the 60 votes needed to overcome Senate filibusters. More than a handful of Republicans have expressed serious concerns about the House-passed AHCA sharp funding impacts to Medicaid. Senate leadership can afford to lose only two Republicans to pass its health care package (the Vice President can break a tie).

How to Register Your Concerns With Your Senators

Call the U.S. Capitol switchboard at (202) 224-3121, and tell the operator what state you are from. You don’t need to know all the details; you can simply tell your Senators’ offices that as a constituent and health care provider, you are seriously concerned about the potential significant decrease in federal funding of your state’s Medicaid program and the resulting negative impacts on the patients you currently serve.

At press time, the Senate leadership planned a vote before the July 4 recess. When the Senate does pass its health care package, it will vary from the House-passed AHCA, requiring a House-Senate conference to hammer out details.

The long and heated summer in D.C. will likely continue well past Labor Day weekend.