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How the Republican health care bill would change federal funding for Medicaid

March 9, 2017 at 6:30 PM EDT
Under the new Republican health care plan to replace the Affordable Care Act, there are major changes to Medicaid funding for states. Judy Woodruff talks to Julie Rovner of Kaiser Health News about why those changes are causing concerns for some states.

HARI SREENIVASAN: The House Republican plan moved a step forward today, but big concerns remain.

In a moment, William Brangham talks to the head of an insurance company.

But, first, Judy Woodruff zeros in on some of the basics about key changes in the Republican bill.

JUDY WOODRUFF: Tonight, we look at Medicaid and some big changes that could be in store under the Republican plan.

Under the Affordable Care Act, more than 10 million more people got coverage in 31 states that expanded their Medicaid program. The GOP approach would eventually change that and more.

For now, the federal government would continue paying for those already added. Starting in 2020, however, enrollment would freeze, and states wouldn’t get additional dollars for signing anyone up.

The Republican bill would also cap how much the federal government pays per Medicaid enrollee. That is a fundamental change.

Julie Rovner of Kaiser Health News joins us again.

Welcome back, Julie.

So, remind us briefly, how did Medicaid work under the Affordable Care Act? How does it work now?

JULIE ROVNER, Kaiser Health News: Well, Medicaid has always been thought of as the health insurance program for the poor, but you had to be more than poor to get on Medicaid prior to the Affordable Care Act. You had to be poor and a pregnant woman or child, poor and disabled, poor and elderly.

If you were poor and none of those things, you were not eligible in many states. The Affordable Care Act changed that. It said that all you had to be was poor, and you could get Medicaid. And originally it was a requirement. The Supreme Court struck that down and made it optional.

And, as you mentioned, 31 states have expanded Medicaid to basically allow everyone who is poor. And that’s under 138 percent of poverty, about $15,000 a year for an individual.

JUDY WOODRUFF: So, why is the Republican leadership changing this?

JULIE ROVNER: Well, the Republican leadership, the Republican Party has been agitating to really scale back Medicaid for many, many years, really starting in the 1980s under President Reagan.

There have been many effort, none of which have come to fruition, to scale back the basic Medicaid program. But, in particular, they don’t like the expansion, which they say is for able-bodied people, and, in practice, not all of the people on the expansion are what you would consider able-bodied.

But the first thing they want to do is get rid of that expanded Medicaid.

JUDY WOODRUFF: And they would put a cap on how much it is that they would give people.

JULIE ROVNER: That’s right.

Well, they would put a cap. It’s called a per capita cap. Basically, they would cap funding per enrollee. This is a different kind of change than had been talked about before, which would just be a block grant, where they would just basically say to state , we’re going to give you a chunk of money. And a state says, well, what happens if we have a recession and more people qualify?

So, this would at least make up for the number of people on the program, but it would still cap spending on what has been since it was created in 1965 an open-ended entitlement that’s shared between the federal government and the states in terms of funding.

Basically, what it would do over time is make states pay a larger and larger share of their Medicaid costs.

JUDY WOODRUFF: And that’s — and so we’re hearing from governors, including Republican governors, that they’re concerned about this.

JULIE ROVNER: That’s right.

And while many Republican governors took the expanded Medicaid, we should point out that the federal government is actually paying a larger share of that expansion than they’re paying for the traditional Medicaid population. And that’s why the complicated phase-out in the Republican proposal.

But, eventually, the Republican governors see that they would not only stop getting the extra money. They would probably get less money than they were getting before the Affordable Care Act for the Medicaid program. And the Medicaid program is either the largest or second largest program in virtually every state’s budget. So we’re talking about a lot of dollars here.

JUDY WOODRUFF: So, a number of these governors are still — still don’t see eye to eye with the Republican leadership and the White House.

JULIE ROVNER: That’s right, and a lot of senators in those states are basically coming out in favor of their governors, saying they’re concerned about this.

JUDY WOODRUFF: And just quickly, Julie, this gets to why some states would be hurt more than others under this plan.

JULIE ROVNER: That’s right.

It would be complicated. It’s not just how many people are on Medicaid. It’s how much Medicaid costs in those states. It’s what it’s based on. This is the ultimate formula fight, which Congress is very familiar with, and it’s a big piece of this legislation that the Republicans are trying the push.

JUDY WOODRUFF: Well, we should say this is all based on what is in this proposed legislation. As you and I are talking, we know all this is subject to change. But this is what we can talk about at this point.

JULIE ROVNER: That’s right.

JUDY WOODRUFF: Julie Rovner, Kaiser Health News, we thank you.

JULIE ROVNER: Thank you.