1. OACT Analysis of Health Reform Legislation
November 8, 2017

2. 2017 Reform Legislation Major Legislative Proposals Programs Affected
American Health Care Act of 2017 (AHCA)
Better Care Reconciliation Act of 2017 (BCRA)
Graham-Cassidy
Programs Affected
Medicaid
Employer
Medicare
Individual

3. Medicaid

4. AHCA Medicaid Provisions
Repeal of Medicaid Expansion
Per Enrollee Allotments and Block Grants
Other Key Provisions

5. Repeal of Medicaid Expansion
AHCA would turn expansion adult group into a closed group starting in 2020
Only those continuously enrolled remain in group (federal matching rate remains at 90%)
Other individuals who would have otherwise been eligible are optional eligibility group for state (and only receive regular federal matching rate)
Baseline: 55% of people in expansion states
Assume all expansion states keep expansion closed group
For expansion states and those no longer in expansion group, assume that:
States keep eligibility at 138% FPL: 10%
States drop eligibility to 100% FPL: 30%
States drop eligibility to 50% FPL: 60%
Ultimately about 50% lose eligibility
Assume remaining enrollees in closed expansion group are in poorer health, higher costs

6. Repeal of Medicaid Expansion
Enrollment
Baseline: 14 million enrollees by 2026
AHCA:
2 million enrollees in expansion closed group by 2026
12 million enrollees lose coverage in expansion group
Of 12 million losing coverage, about 6 million are covered through optional eligibility groups by states; remaining 6 million mostly uninsured, some choose private coverage
Expenditures
Baseline: $655 billion in federal expenditures for
AHCA: Federal expenditures decrease by $275 billion for (including costs of those no longer in expansion group)

7. Per Enrollee Allotments and Block Grants
States currently receive federal matching funds as percent of total expenditures with no limit
AHCA would introduce per enrollee allotments and block grants starting in 2020, and states would have to choose one or the other
Per enrollee allotments
Calculate base per enrollee costs by state and by eligibility group
Trend forward by medical CPI (M-CPI) for adults and children, by M-CPI + 1% for aged and persons with disabilities
Each year, state allotment would be equal to enrollment multiplied by per enrollee costs for each group and totaled
Block grants
Calculate base per enrollee costs in same way as per enrollee caps
State could put adults or children and adults in block grant
Block grant calculated as enrollment multiplied by per enrollee costs in first year, then total amount is trended forward by CPI (no provision for enrollment)

8. Per Enrollee Allotments and Block Grants
Assumptions
All states would choose per enrollee allotments – per enrollee caps grow faster because M-CPI grows faster than CPI, and per enrollee caps account for enrollment growth
Expenditures
Federal expenditures decrease by $65 billion from , but reduction is growing over time (from less than $1 billion in 2020 to $19 billion in 2026)
Per enrollee allotments estimated to grow about 0.5% slower per year on average than projected per enrollee costs in baseline
Enrollment
No changes to enrollment

9. Other Key Medicaid Provisions
Ends some presumptive eligibility programs
Ends retroactive eligibility
More frequent eligibility redeterminations
Provides state option to put work requirements on adults
Eliminates DSH cuts made by ACA
Extra funding to states that did not expand Medicaid

10. AHCA Medicaid Impacts Expenditures Enrollment
Federal expenditures decrease $383 billion from
Repeal of Medicaid expansion: $275 billion
Per capita allotments: $65 billion
All other provisions: $43 billion
Total expenditures decrease $415 billion
State expenditures decrease $32 billion
Enrollment
8 million fewer enrollees by 2026
6 million net decrease due to repeal of Medicaid expansion
2 million net decrease from all other provisions

11. BCRA Medicaid Provisions
Medicaid expansion
Keeps Medicaid expansion, but with following changes:
Optional eligibility group and states can choose any income limit up to 138% FPL
Higher Federal matching rate decreases from 90% down to regular matching rate by 2024
Consideration of Marketplace changes on state decisions to keep or drop expansion
Per enrollee allotments
Establishes per enrollee allotments, but changes in base calculation and update factors
Starting in 2025, caps only increase by CPI for all groups (down from M-CPI or M-CPI + 1%)
Other changes from AHCA
Block grants
DSH
IMDs
Federal matching rate for American Indians expenditures

12. BCRA Medicaid Impacts Expenditures Enrollment
Federal expenditures decrease $492 billion from
Repeal of Medicaid expansion: $346 billion
Per capita allotments: $119 billion
All other provisions: $28 billion
Total expenditures decrease $609 billion
State expenditures decrease $117 billion
Enrollment
9 million fewer enrollees by 2026
7 million net decrease due to repeal of Medicaid expansion
2 million net decrease from all other provisions

13. Graham-Cassidy Medicaid Provisions
Medicaid expansion
Ends Medicaid expansion in 2020
Options for states to continue coverage
Per enrollee caps
Same as BCRA
Other changes from BCRA
DSH

14. Per enrollee caps and block grants Any other key changes
Medicaid Comparison
Current Law (ACA)
AHCA
BCRA
Graham-Cassidy
Medicaid Expansion
138% FPL; state option; higher federal matching rate (90% from 2020 on)
Closed group starting in 2020 with 90% federal matching rate; state option to cover up to 138% FPL at regular matching rate
State option to cover up to 138% FPL with matching rate decreasing to regular matching rate by 2024
Expansion ends in 2020; could be covered using state grants
Medicaid Funding
Federal matching on expenditures, no limit
Per enrollee caps or block grants for most expenditures starting in 2020
Same as BCRA
Per Enrollee Allotments -
Caps by state and eligibility group; grow at M-CPI (children and adults) or M-CPI + 1% (aged and disabled)
Caps by state and eligibility group; grow at M-CPI (children and adults) or M-CPI + 1% (aged and disabled) through 2024; grow by CPI starting in 2025
Block Grants
Grants for adults or children and adults; grow at CPI with no provision for enrollment
Grants for all groups; grow at CPI with provision for enrollment
Other Key Medicaid Changes
Eligibility changes; restores DSH cuts; extra funds to non-expansion states
Same as AHCA with: changes to DSH provision; use of IMDs; higher matching rates for American Indians
Same as BCRA with changes to DSH provision
Expansion
Per enrollee caps and block grants
Any other key changes

15. Employer Market & Medicare

16. Employer Market & Medicare
Repeal of the Employer Mandate
Repeal of the Individual Mandate
Medicare
Repeal of the HI Tax on high-income earners
Repeal of the health insurance tax
Repeal of the tax on Rx
Impact on DSH payments

17. Individual Market

18. Individual Market Comparison
Current Law (ACA)
AHCA
BCRA
G-C
Subsidy Eligible
% FPL
Up to $75,000
Up to 350% FPL
N/A
Premium Subsidy
Income-Based
Age-Based
Age & Income
None
Cost-sharing Subsidy
% FPL
High-Risk Pool
$135 Billion
$226 Billion
$1 Trillion
Age Rating
3:1
5:1
Subsidy Base
70% AV
58% AV
Essential Health Benefits / Community Rating
Required
Can be waived
State Decision off-Marketplace
State Decision

19. Key Findings for AHCA
Number of uninsured estimated to be 4 million higher in 2018 and 13 million higher in 2026
Medicaid (-8 million), ESI (-3 million), Individual (-1 million)
Federal expenditures reduced $330 billion (not counting tax provisions)
Medicaid expansion (-$270 billion)
Other Medicaid (-$110 billion)
Individual market (-$200 billion)
Stability fund ($140 billion)
Medicare ($120 billion)

20. Estimated Effects of the American Health Care Act of 2017, on individually-Purchased Insurance Premium Rates and Cost-Sharing Amounts
Calendar Year
Monthly Amounts
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Gross Premium
Current Law
$530
$559
$587
$618
$652
$687
$723
$761
$801
Proposed Law
467
497
490
515
542
576
627
661
695
Change
−64
−62
−97
−103
−110
−95
−100
−106
Pct Change
-12%
-11%
-16%
-17%
-13%
Net Premium
$239
$251
$264
$278
$293
$309
$325
$342
$360
246
259
237
252
269
294
335
357
380 7 8
−27
−26
−24
−15 10 15 19 3%
-10%
-9%
-8%
-5% 4% 5%
Out-of-Pocket Costs
$146
$158
$166
$175
$185
$196
$206
$217
$229
159
172
271
284
298
317
343
361 13 14
105
109
113
121
137
144
151 9%
63%
62%
61%
66%
Note: A portion of the increase in the gross and net premiums in 2023 and 2024 is due to the assumed depletion of the $15 billion in funding for maternity and mental health benefits and because the $8 billion in funding for those with pre-existing conditions ends in 2023.

21. Decomposition of Factors Impacting Individually-Purchased Insurance Gross and Net Premiums and Cost-Sharing
2020
2026
Gross Premium
Net Premium
Cost Sharing
Current Law
$587
$264
$166
$801
$360
$229
% change due to:
Elimination of the Cost-Sharing Subsidy —
28%
27%
Premium Subsidies based on Age instead of Income
38%
47%
Patient and State Stability Fund
-6%
-26%
-5%
-24%
State Option to Waive EHB and Community Rating
-12%
-4%
-9%
Actuarial Value
-11%
32%
Other* 5%
14% 3% 7%
16%
Total
-16%
-10%
63%
-13%
66%
Proposed Law
$490
$237
$271
$695
$380
*Includes selection effects, impacts of changing age mix of enrollees, impacts of individuals previously covered by employer-sponsored insurance or Medicaid, elimination of the health insurance tax, and any interaction effects between the other factors.

22. Note: Enrollment changes in employer-sponsored insurance and non-expansion Medicaid not included.

25. Individual Market Comparison
Current Law (ACA)
AHCA
BCRA
G-C
Subsidy Eligible
% FPL
Up to $75,000
Up to 350% FPL
N/A
Premium Subsidy
Income-Based
Age-Based
Age & Income
None
Cost-sharing Subsidy
% FPL
High-Risk Pool
$135 Billion
$226 Billion
$1 Trillion
Age Rating
3:1
5:1
Subsidy Base
70% AV
58% AV
Essential Health Benefits / Community Rating
Required
Can be waived
State Decision off-Marketplace
State Decision

26. Key Findings for BCRA
Number of uninsured estimated to be 4 million higher in 2018 and 9 million higher in 2026
Medicaid (-9 million), ESI (-3 million), Individual (+3 million)
Federal expenditures reduced $230 billion (not counting tax provisions)
Medicaid expansion (-$350 billion)
Other Medicaid (-$140 billion)
Individual market ($0)
Stability fund ($230 billion)
Medicare ($40 billion)

27. Estimated Effects of the Better Care Reconciliation Act of 2017, on individually-Purchased Insurance Premium Rates and Cost-Sharing Amounts
Calendar Year
Monthly Amounts
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Gross premium
Current law
$530
$559
$587
$618
$652
$687
$723
$761
$801
Proposed law
467
497
545
574
606
637
668
703
741
Change
−64
−62
−42
−44
−46
−50
−55
−58
−60
Pct change
−12%
−11%
−7%
−8%
Net premium
$239
$251
$264
$278
$293
$309
$325
$342
$360
240
253
217
220
232
242
250
263
278 2
−47
−61
−67
−75
−79
−82
Pct Change 1%
−18%
−21%
−22%
−23%
Cost-sharing amounts
$161
$167
$176
$185
$194
$204
$214
$225
$236
168
174
146
145
175
192
209
225
$241 7 8
−29
−40
−19
−12 −5 −0 5 5%
−17%
−10%
−6%
−2%
−0% 2%
Off-Exchange premium
$292
$305
$320
$337
$355
$374
$393
Off-Exchange cost sharing
$280
$307
$323
$340
$358
$377

28. Average Monthly Spending for Individually Purchased Insurance, 2026

31. Individual Market Comparison
Current Law (ACA)
AHCA
BCRA
G-C
Subsidy Eligible
% FPL
Up to $75,000
Up to 350% FPL
N/A
Premium Subsidy
Income-Based
Age-Based
Age & Income
None
Cost-sharing Subsidy
% FPL
High-Risk Pool
$135 Billion
$226 Billion
$1 Trillion
Age Rating
3:1
5:1
Subsidy Base
70% AV
58% AV
Essential Health Benefits / Community Rating
Required
Can be waived
State Decision off-Marketplace
State Decision

32. (Amounts in millions of dollars)
Estimated State Funding Amounts under Current Law compared to Graham-Cassidy
(Amounts in millions of dollars)
Calendar Year 2020
Calender Year 2026
State
Current Law
Proposed
Change
% Change
Total
150,426
148,800
(1,626)
-1%
211,647
193,200
(18,447)
-9%
Alabama
879
1,028
149
17%
1,230
3,589
2,360
192%
Alaska
443
703
260
59%
622
388
(234)
-38%
Arizona
3,541
3,361
(180)
-5%
5,008
4,573
(436)
Arkansas
2,185
2,075
(111)
3,074
2,387
(687)
-22%
California
32,478
30,831
(1,647)
45,663
24,933
(20,730)
-45%
Colorado
2,473
2,347
(125)
3,477
2,658
(819)
-24%
Connecticut
2,114
2,007
(107)
2,973
1,428
(1,545)
-52%
Delaware
619
588
(31)
875
459
(416)
-48%
District of Columbia
487
462
(25)
686
353
(333)
-49%
Florida
7,980
8,327
347 4%
11,168
13,905
2,737
25%
Georgia
2,234
2,493
258
12%
3,127
6,873
3,746
120%
Hawaii
711
675
(36)
1,002
550
(452)
Idaho
422
461 38 9%
591
1,105
514
87%
Illinois
5,208
4,944
(264)
7,325
6,980
(345)
Indiana
2,857
2,712
(145)
4,022
3,943
(80)
-2%
Iowa
1,157
1,098
(59)
1,627
1,632 5 0%
Kansas
350
421 71
20%
490
1,637
1,147
234%
Kentucky
3,362
3,191
(170)
4,731
3,167
(1,564)
-33%
Louisiana
4,172
3,960
(211)
5,865
3,473
(2,391)
-41%
Maine
409
433 24 6%
572
823
251
44%
Maryland
3,341
3,172
(169)
4,700
2,303
(2,397)
-51%
Massachusetts
2,913
2,923 10
4,120
2,909
(1,212)
-29%
Michigan
5,335
5,065
(270)
7,503
6,113
(1,390)
-19%
Minnesota
2,622
2,489
(133)
3,707
2,511
(1,197)
-32%
Mississippi
404
521
116
29%
566
2,530
1,964
347%
Missouri
1,282
1,414
132
10%
1,794
3,635
1,841
103%
Montana
762
1,177
415
55%
1,070
624
(446)
-42%
Nebraska
390
426 36
546
1,037
491
90%
Nevada
1,589
1,508
(81)
1,824
(409)
-18%
New Hampshire
608
577
855
460
(394)
-46%
New Jersey
4,624
4,390
6,499
3,931
(2,568)
-40%
New Mexico
1,825
1,732
(93)
2,568
1,745
(823)
New York
14,690
13,946
(745)
20,877
11,704
(9,173)
-44%
North Carolina
3,494
3,694
200
4,888
6,973
2,085
43%
North Dakota
425
645
219
52%
598
331
(267)
Ohio
5,568
(297)
8,255
6,759
(1,496)
Oklahoma
642
752
110
898
2,641
1,743
194%
Oregon
3,358
3,188
4,724
2,426
(2,298)
Pennsylvania
6,768
6,425
(343)
9,518
6,628
(2,890)
-30%
Rhode Island
486
683
562
(121)
South Carolina
1,049
1,176
126
1,468
3,322
1,853
126%
South Dakota
128
489
361
282%
179
470
291
162%
Tennessee
1,104
1,294
189
1,545
4,539
2,994
Texas
4,336
5,134
798
18%
6,067
18,818
12,751
210%
Utah
524
578 54
733
1,492
759
Vermont
378
359
(19)
534
278
(256)
Virginia
1,625
121 7%
2,273
3,757
1,484
65%
Washington
3,241
3,077
(164)
4,560
3,535
(1,025)
West Virginia
1,206
1,145
(61)
1,696
1,303
(393)
-23%
Wisconsin
1,159
1,259
100
1,621
2,935
1,314
81%
Wyoming
170
356
186
109%
238
248
These estimates reflect the following assumptions for the Graham-Cassidy state-by-state allocations:
1)      The allotments to states do not reflect any net effects for the population risk, coverage value, or state specific population adjustments. It is possible that the application
of these adjustments could shift states in or out of the various categories.
2)      $6.8 billion of the $10 billion reserved funds from section 4(C) are assumed to be allocated in 2020 and the remaining $3.2 billion are assumed to be allocated in 2026.
3)      The $6 billion in 2020 and $5 billion in 2021 contingency fund for low-density and non-expansion states are included in the allotments.
4)      The total allotment by year in billions of dollars is $149 in 2020, $151 in 2021, $157 in 2022, $168 in 2023, $179 in 2024, $190 in 2025, and $193 in 2026.
5)      The allocations by state in 2026 are based on their share of the population with incomes between 50% and 138% of the Federal Poverty Level.
6)      The current law projections are based on our estimates of the 2018 Mid-session review budget.
7)      The 2020 estimates reflect our current law projections reduced proportionately to the allotment level.  It is possible that the method specified in the law for determining
the 2020 allotments could lead to some differences from our approach but not in a way that we think is significant for this evaluation.
8)      The estimate does not include any effects of the short term stability funding.