McConnell says his bill wouldn't take anyone off Medicaid; critics of the bill say it would, starting with some children, then adults

McConnell in Paducah July 5

(Photo by Nicole Erwin, WKMS-FM)

By Melissa Patrick and Al Cross
Kentucky Health News

At a July 5 luncheon in Paducah, Senate Majority Leader Mitch McConnell said, “Nothing we've advocated so far would cause anyone currently on Medicaid to come off of it,” Adam Morton reports for the West Kentucky Star.

Not directly, perhaps, but likely indirectly, especially for the 475,000 children and adults who are covered by the expansion of Medicaid under the Patient Protection and Affordable Care Act. That's because the bill McConnell has been pushing would reduce the money the federal government gives the state to pay their medical bills.

After the completion of that reduction, in 2024, the bill would then limit the money that the federal government gives the state for traditional Medicaid, rather than the current system of reimbursing the state a percentage of what it spends, called the Federal Medical Assistance Percentage, or FMAP. Currently, for traditional Medicaid, Kentucky gets about 70 percent. For expanded Medicaid, it gets 95 percent this year, declining in annual steps to the current law's floor of 90 percent in 2020.

McConnell spokesman Robert Steurer referred to the FMAP when asked to explain the senator's comment. “Those who are currently on Medicaid can remain on Medicaid,” he said in an email. “Beginning in 2021, the enhanced rates for the expansion population will begin to gradually decline by 5 percentage points (meaning states will gradually pay more of their share for the expansion group) until 2024 when the state will receive the normal FMAP.”

Steurer added that the Congressional Budget Office “believes some people will ‘choose’ to leave Medicaid over the next four years, but does not say they will be forced” by the Better Care Reconciliation Act, which McConnell is pushing.

Medicaid is not a static program. Many people go on and off of it each month, as their incomes and situations change. Three years ago, that “churn” was about 30,000 a month. Those on the program when the legislation takes effect "would not be the same population of people who are 'currently' on Medicaid," Michelle Ye Hee Lee writes in The Fact Checker column in The Washington Post. "Some people may leave Medicaid if, for example, they had access to employer health insurance. They may not be able to get back on Medicaid if they sought to later, if the eligibility changes."

The Post goes on: "The bill does not require or direct states to change Medicaid, and states run their own Medicaid programs. This is the crux of McConnell’s argument. States can make choices that are best for them regardless of BCRA, and it doesn’t mean that federal law would 'cause' these changes, explained McConnell’s staff. Some states would choose to keep their current level of Medicaid coverage, and change their state budget priorities to make that work. But some states would scale back or eliminate coverage for newly insured Medicaid populations because of the financing changes in BCRA, according to CBO."

Kentucky ACA advocates disagreed with McConnell's assertion that the Senate bill won't cause anyone now on Medicaid to lose their coverage.

“I can't begin to understand why he said that,” said Dustin Pugel, a research and policy associate for the liberal-leaning Kentucky Center for Economic Policy.

He said some children on Medicaid would lose coverage under the Senate bill, because “The eligibility threshold for kids between 6 and 16 goes from 138 percent down to 100 percent” of the federal poverty level.

Pugel said elimination of the increased funding for the expansion is almost certain to cause people in Kentucky to lose coverage.

“Kentucky would have to come up with 405 million dollars each year just for the expansion, just to maintain the expansion,” he said. “We almost certainly wouldn't do that. I really don't think that our state government would decide to cough up that much money for Medicaid expansion considering all the talk around our pension crisis and budget shortfalls.”

State Budget Director John Chilton said in May that Kentucky needs an additional $700 million a year to “responsibly tackle” its pension crisis. Gov. Matt Bevin has said he will call a special legislative session this year to address it.

Emily Beauregard, executive director of Kentucky Voices for Health, an organization of pro-ACA groups, called McConnell's statement misleading. She said the CBO analysis estimates “that states will simply not be able to shoulder that additional cost and therefore will cut their Medicaid expansion programs if they have them.”

The CBO estimates that of the 22 million people by 2026 who lose coverage, 15 million of them will be Medicaid enrollees. “And in Kentucky, the Urban Institute says that 704,000 of that 15 million are going to be Kentuckians,” Pugel said.

The estimates are based partly on a new per-person limit that the bill would place on state Medicaid funding. The amount would increase each year, but not enough to keep up with inflation in health-care costs, the bill’s opponents say.

“The state's going to have less and less money to be able to pay for the same amount of care or more care,” Pugel said. “The state is going to have to either cover fewer people, cover fewer benefits, or pay providers even less." They already complain about reimbursement rates.

The CBO estimates a 26 percent reduction in the purchasing power of Medicaid in the first 10 years under the Senate bill is enacted, and 35 percent in the second 10 years.

“The bottom line is they are cutting federal funding to the Medicaid program by $770 million, which will result in people losing coverage and I don't think there is another way to interpret that,” Beauregard said. “Whenever you cut a federal program like that, it directly results in people losing coverage and you can't say otherwise and it be accurate.”

Pugel said he would like to ask McConnell how he expects Kentucky to maintain the state's Medicaid enrollment levels with such cuts: "There are estimates that Kentucky could see as much as a 58 percent decrease in federal funding for Medicaid,” he said. “I don't think you could absorb that kind of a cut without people losing coverage.”

McConnell's office didn't respond to a request for comment on Pugel's and Beauregard's remarks. On Monday, he gave a speech about how his bill would address problems with private insurance in Obamacare, but made no mention of Medicaid.

The Post's "Fact Checker" column gives McConnell's statement about Medicaid three Pinocchios out of four, meaning that it is "deeply misleading": "McConnell pushed the envelope here. The reality is that BCRA is the potential intervening factor for whatever choices states would make in response, and CBO estimated it would lead to 15 million fewer Medicaid enrollees by 2026, compared to current law." Here's a video report from the Post: