1. The Outlook for Medicaid: Beating Back Cuts ‘n Caps
Families USA
Ellen Nissenbaum
February 17, 2007

2. You Have Already Made a Difference -- and you can make a BIG one on Medicaid too!

3. ACA Repeal: Uncertainty Abounds
Timeline uncertain and slipping
Growing demand for simultaneous repeal and replace
No consensus yet on replacement
“Replace?” “Repair?”
Double whammy Medicaid threats
GO THRU PROCESS AND TIMETABLE
2 budgets/ 2 reconciliation
Repeal + some repalacement (no one replacement bill)
The ACA repeal budget resolution has passed – next step is the reconciliation bill to actually do the repeal, which remember, only needs a simple majority to pass.
Let me stop and say that this is real progress—we started with “Repeal and delay” as the benchmark here. And now we’re at a point at which Republican leaders have said that they’ll do a simultaneous repeal and replace bill.
But from what we’ve seen so far, the replacement ideas being put forward fall well short of the ACA in terms of ensuring the same level of coverage without increasing costs for families or removing some of the key insurance protections in the ACA. The typical ideas that we see across GOP plans – expansions of health savings accounts, high-risk pools, selling plans across state lines – all have this problem, which is that any combination of them can’t measure up to the ACA on the basic benchmarks Republicans are promising and voters expect.
And importantly, the bills both revealed divides even within the Republican Party about what might be acceptable in a replacement bill.  
The last thing to note here is that Republicans have been making a small but significant language shift. Many of them are now saying we need to “repair” (and replace) the ACA, instead of “repeal and replace.” This is likely because of the public blowback against wholesale repeal – not to mention the fact that large majorities of Americans like many elements of the ACA! It also fits in with their false argument about the ACA being a disaster or a death spiral. We need to continue making the case that the ACA is working and that the greatest risk of a “death spiral” comes from repealing the ACA, which the Republicans have been consistent is their ultimate goal.

4. Only need 51 votes in Senate
Reconciliation =
Key Vehicle
Only need 51 votes in Senate
Reconciliation is a budget procedure that can be used to pass some major legislation (not everything – for example, can’t touch Social Security, can’t increase the deficit over the long term). It has a huge procedural advantage in the Senate—a reconciliation bill cannot be filibustered, which means it does not have to reach the 60 vote count threshold that is normally required for most legislation. Instead, reconciliation bills only need a simple majority to pass or 51 votes.
The Senate has 52 Republicans now, so that means Republicans can use reconciliation to pass legislation on their own, without any Democratic votes – if they can hold all Republicans. They are already planning to use reconciliation to repeal the ACA, and, as we’ll discuss on the next slide, they may use a second reconciliation bill to enact massive tax changes that are paid for by changes and cuts to entitlement programs.
So now we’ll take a look at the tentative timeline we’re expecting for how these threats will play out. This is all very fluid, and the dates can easily change. We need to operate as if things are going to move at the earliest/quickest possible timeline so that we can be ready for whatever comes. First I’m going to talk about what we expect to happen in the next four months – from now through May – and then I’ll touch on what we expect in the summer/fall. Obviously the further out we’re looking, the harder it is to predict things, but I can at least give you a preview.

5. “Double Whammy” Threats to Medicaid
Repeal or rolling back the Medicaid expansion
Reduced FMAP (trigger states)
Allowing states to expand to less than 138% FPL
Converting Medicaid to a cap (PCC) or a block grant – OR BOTH!?
delay
backloaded cuts (smaller than expected?)
“maintains the expansion”
Both coupled with new flexibility for states– flex to cut!
Attacks focusing on “out-of-control spending,” “gaming,” and “straying from its true purpose,” etc.
BLOCK GRANT VS CAP – nearly same except for one thing
Explain the diff.
Describe HOUSE PROPOSAL

6. Medicaid Spending Grows Slower Than Private Insurance
Medicaid spending per beneficiary has grown more slowly than private insurance
Rationale is predictability / lowering rate of growth

7. Medicaid Per Capita Cap Cuts Federal Funds to States
Cap federal spending per beneficiary. Doesn’t keep up with increases in health care costs
Doesn’t account for demographic changes & new treatments.
Undermines Medicaid expansion
Likely coupled with “flexibility” that could hurt kids and families
RATIONING Medicaid for seniors, kids, people w/ disabilities?
FLEX:
Eligibilty
Benefits
Higher cost sharing
Work requirements

8. HOUSE REPUBLICAN PROPOSAL – no real plan!
Ends Medicaid as we know it
Expansion $ repealed
Block grant or per capita cap
Ultimate insult
Same old failing policies:
High risk pools
Tax credits that are too small (not pegged to income)
HSAs
No real protection against pre-existing conditions
TIME TO PIVOT TO GOVS (winter meeting) and the Senate!

9. Federal Medicaid Per Enrollee Spending
Capping Rate of Growth in Medicaid Spending Per Enrollee Leads to Severe Cuts Over Time
Federal Medicaid Per Enrollee Spending
Sources: House Republican health plan, CBPP analysis of BLS and CBO data

10. Current Medicaid Financing System vs. Capped Medicaid Funding
Impact of Unanticipated Health Care Costs and Cost Increases Not Built Into Growth Rate
Current Medicaid Financing System vs. Capped Medicaid Funding
$120
$120
$100
$100
FEDERAL CAP

11. Cuts Will Fall Primarily on Beneficiaries
Magnitude of Federal Medicaid Cuts is Large and Medicaid is Already Very Efficient
REMINDER: Three ways to cut costs 1. 2. 3.
Payments to providers are already very low in Medicaid
That leaves cuts to beneficiaries:
Either cut benefits or limit enrollment

12. KEY CONCERN:
1. No “bait and switch:” The PCC is not a compromise! 2. Not “which 3 votes…” – but rather “preemptive and proactive.”
EXPLAIN preemptive and proactive.

13. What do we need to do? Governors are key
Winter NGA meeting: “do no harm” -- no slippage!
PCC dangers
Broaden focus from risk to Medicaid expansion to include the cap
Use the Feb recess - - and think ahead to April
Prepare to react to possible House Energy/Commerce markup
Senate: think preemptive and proactive:
Focus on Republican senators from expansion states –stress the cap too!
Other senators on the cap
EXPLAIN preemptive and proactive.