GOP's Medicaid plan penalizes some states, rewards others

Kasich vows to defend Medicaid through GOP cuts

brand new England’s bucolic countryside looks much the same on either side of the Connecticut River separating Vermont through brand new Hampshire.

although Medicaid beneficiaries are far better off in Vermont.

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Vermont generously funds its Medicaid program. the item provides better benefits, such as dental care, along with pays doctors more than brand new Hampshire’s program does. that will brings more doctors into the program, giving enrollees more access to care.

brand new Hampshire has twice Vermont’s population, although Vermont spends almost as much on Medicaid along with covers more enrollees. Under the complicated formulas that will set federal funding, Vermont’s substantial investment helps the item capture nearly as much aid through the government as brand new Hampshire gets.

States’ policies differ about who or what to cover in Medicaid, along with those decisions have led to historical variances in how much federal money they receive. House Republicans’ effort to shrink federal Medicaid spending would likely lock inside the differences in a way that will favors those already spending high amounts per enrollee.

Related: Trump administration open to creating some Medicaid recipients work, pay premiums

“Republicans are finding out why changing Medicaid will be so hard along with why the easiest thing to do will be to do nothing given the substantial variation in federal spending across states,” said John Holahan, a health policy expert with the nonpartisan Urban Institute.

Here’s why.

Medicaid, the national health program for low-income people that will covers about 1 in 5 Americans, will be 60% funded by the federal government along with 40% by states. Total spending in 2015 was about $532 billion, according to the latest official data.

Federal funding will be open-ended, which means the government guarantees states the item will pay a fixed rate of their Medicaid expenses as spending rises.

Those matching rates are tied to average personal incomes along with favor the lowest-income states. Mississippi has the highest Federal Matching Assistance Percentage — 76% — while 14 wealthy states, including brand new York along with California, get the minimum 50% through the federal government.

although state Medicaid spending varies significantly, too, along with that will influences how much federal money each receives to fund its program. State policies about how generous benefits should be along with how much to pay doctors along with hospitals account for those differences.

Related: 5 ways the GOP health bill could change your health

GOP leaders want to give states a set amount of money each year based on the number of Medicaid enrollees they had in 2016, a formula known as per-capita caps.

A per-capita system would likely benefit high-spending states already receiving relatively rich allotments through the government, the Urban Institute said in a paper last September.

According to its estimates, if the system were in effect that will year, Vermont would likely receive $6,067 per enrollee — one of the highest allotments inside the country — while brand new Hampshire would likely get the least, just $3,084 per enrollee.

Per-capita caps would likely limit the government’s Medicaid spending because the item would likely no longer be on the hook to help cover states’ rising costs. although caps also would likely shift costs along with financial risks to the states along with could force them to cut benefits or eligibility to manage their budgets.

“the item would likely present a huge problem,” said Adam Fox, a spokesman for the Colorado Consumer Health Initiative, an advocacy group.

Under the GOP bill, federal Medicaid funding to states would likely be adjusted annually based on a state’s enrollment along with medical inflation. although that will would likely not be enough to keep up with rising Medicaid spending per enrollee, which would likely force states to put up more of their money or scale back the program, the nonpartisan Congressional Budget Office said Monday.

various other analyses of the GOP plan have reached the same conclusion.

Since 1999, however, the average annual growth rate in Medicaid spending per enrollee has risen more slowly than medical inflation, according to MACPAC, the Medicaid along with CHIP Payment along with Access Commission, which advises Congress.

Related: Montana may be a product for the Medicaid work requirement

Republicans argue that will overhauling federal Medicaid spending as they propose would likely hold down federal costs while giving states more leeway to run their programs as they see fit. “that will incentive would likely help encourage efficiencies along with accountability with taxpayer funds,” House Speaker Paul Ryan wrote last June in his white paper, “A Better Way.”

Rep. Greg Walden of Oregon, chairman of the powerful House Energy along with Commerce Committee, which has oversight of health care matters, sounded a similar note at a press conference in Washington, D.C., when the GOP plan was announced. “I think the item’s truly important to empower states along with to put Medicaid on a budget,” he said.

although Fox argued the opposite would likely happen under a per-capita system — instead of gaining more control over their Medicaid programs, states would likely not be able to meet their needs because they’d have fewer dollars to decide how to spend, he said.

Bill Hammond, director of health policy for the nonpartisan Empire Center for Public Policy in brand new York, said House leaders’ decision to tie future Medicaid funding to medical inflation could help mute concerns that will funding wouldn’t keep up with rising costs, although would likely not address the fairness issue of giving some states higher per-capita amounts than others.

Related: Governors divided over Medicaid’s future, although don’t want anyone to lose coverage

“If a low-spending state decides the item wants to spend more money on paying hospitals along with doctors or adding more benefits, they would likely have a harder time doing that will without breaking the federal cap,” he said.

Medicaid advocates in brand new Hampshire are worried because their state has few alternatives to make up for a loss in federal funding. brand new Hampshire lacks an income or sales tax.

“There will be a tremendous amount of fear among families here as Republicans try to dismantle the ACA,” said Martha-Jean Madison, co-director of brand new Hampshire Family Voices.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, will be an editorially independent part of the Kaiser Family Foundation.

sy88pgw (brand new York) First published March 15, 2017: 7:17 PM ET

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GOP's Medicaid plan penalizes some states, rewards others

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