BREAKING: Senator Toomey Seeking Massive Cuts to Medicaid Funding in Senate Health Care Bill

HARRISBURG – The Center on Budget and Policy Priorities today released a paper outlining the harmful impact of changes that Senator Pat Toomey is proposing to the health care bill as negotiations continue in the Senate. The details of these changes, just now emerging, would do significant harm to Pennsylvania’s economy, our children, seniors, parents and persons with disabilities.

The House-passed bill to repeal the Affordable Care Act (ACA) would effectively end the Medicaid expansion and radically restructure Medicaid by converting it to either a per capita cap or block grant.  Together, these changes would cut federal Medicaid spending by $839 billion over ten years and reduce enrollment by 14 million people by 2026, relative to current law.

Some Senate Republicans, led by Senator Pat Toomey, are seeking additional changes to the per capita cap that would dramatically expand those already highly damaging cuts.

The Pennsylvania Budget and Policy Center and the Pennsylvania Health Access Network released the following statement regarding this development:

Marc Stier Executive Director of the Pennsylvania Budget and Policy Center said, “Senator Toomey is proposing changes to Medicaid funding that are far more radical, and far more harmful to Pennsylvania, than those found in the already devastating American Health Care Act that passed the House two weeks ago.  Huge tax increases or, far more likely, devastating cuts to the Medicaid program will be the result. Cuts in the Medicaid program, which already is far more cost-effective than both Medicare and private insurance, cannot be sustained at this level without a radical reduction in benefits or eligibility. The consequences for our rapidly aging population in Pennsylvania are predictable: far fewer people receiving any health care; far fewer people receiving all the care they need; and far fewer seniors obtaining the long-term care they need. People will die for lack of health care or senior care."

Antoinette Kraus, Executive Director of the Pennsylvania Health Access Network said, “ The GOP bill that passed the House last week would radically restructure Medicaid and end a 50 year entitlement program that has helped children, seniors and individuals with disabilities get the care they need. Senator Toomey’s proposal will only make a bad bill worse. We are calling on Senator Toomey to stop playing politics with people’s lives and instead reject any proposals that will result in an increase in the number of  uninsured, the radical restructuring of Medicaid or any proposal that ends Medicaid Expansion.

Key Highlights from the Center on Budget Report:

Under the AHCA, starting in 2020, states would receive the amount of money they spent per person on each Medicaid beneficiary under the program. The cap would increase over time by a fixed amount based on some index of inflation.

A key determinant of how much a per capita cap reduces Medicaid spending is what index of inflation is used. Under the AHCA, the cap increase annually through 2019 at the rate of increase of the the medical care component of the Consumer Price Index (M-CPI), which the Congressional Budget Office (CBO) expects to grow by 3.7 percent per year over the next ten years. Beginning in 2020, the caps for seniors and people with disabilities would rise by the M-CPI plus one percentage point.

This is already too low. CBO expects that cost to Medicaid of providing care under current law will increases not at the M-CPI rate of 3.7%, but at 4.4% over ten years.

Senator Toomey has proposed using the general inflation rate, which CBO projects to be 2.4% over ten years, as the index by which the per capita cap goes up. This means shifting a large portion of the cost of Medicaid to the states, which would leave to either huge state tax increases or, more likely, devastating cuts to the number of Medicaid beneficiaries and the services they receive.  

Read the full report here.