The repeal and replace bill: Medicaid’s most dangerous enemy?

After months of Republican vows and political rhetoric on repealing and replacing the Affordable Care Act (ACA), the GOP introduced its proposed bill this week amid a flurry of media coverage and association outcry. More than 90 associations and agencies—including LeadingAge, the Gerontological Society of America, AARP, the American Society of Consultant Pharmacists and the National Association of State Long-Term Care Ombudsman Programs—have blasted the bill as a stake in the heart of Medicaid.

The proposed American Health Care Act would make sweeping changes to the foundations of Medicaid, including placing a cap on the funding provided to states, either though block grants or per-capita limits. The action would cause “radical structure changes” to the Medicaid system, especially for dual-eligibles, the association groups said in a letter to Congressional leaders. Placing so much burden for Medicaid on the states could erase the only safety net available for millions of Americans who cannot afford the services and supports they need.

“The program is a lifeline for older adults, covering more than one in seven (6 million) older Americans in 2015,” the groups said in the letter. “These are individuals who cannot afford insurance through the private market in any meaningful sense to match their needs. Medicaid coverage is particularly important for older adults and people with disabilities who need services not covered by Medicare, who cannot afford Medicare premiums and cost-sharing, who require mental healthcare or substance abuse treatment [or] who live in rural communities.”

Support for the repeal and replace movement has come primarily from the removal of taxes and penalties under the insurance mandates and the policy requirements under the health insurance marketplace, which the insurance industry says are sending the law into “a death spiral.” “The American Health Care Act rescues people from this collapsing law, and begins a stable transition to a patient-centered system that gives every American access to quality, affordable care,” said House Speaker Paul Ryan, R-Wis., in an explanation of the bill.

While parts of the repeal bill have bipartisan support, other parts are receiving cross-party resistance. The refundable tax credits retained by the bill are angering conservatives, who see them as a type of entitlement program. Meanwhile, the states that adopted Medicaid expansion are crying foul over the Medicaid revisions and the planned phase-out of the expansion program in 2020, knowing they will face millions of uninsured residents if the Medicaid expansion structure is changed.

Also of note: As many predicted, the repeal bill is focused on the insurance elements of the ACA, meaning most of the other portions of the original ACA will probably remain in place. The repeal bill would abolish the individual insurance mandate and the employer insurance mandate, two of the most contentious portions of the original ACA. But many other portions of the ACA, including value-based purchasing, mandates for quality improvement, Accountable Care Organization (ACO) programs and everything currently tied to the Medicare mandates, probably won’t be going away anytime soon.

Meanwhile, congressional committees will begin the draft bill’s markups and revisions, striving to gain the majority votes the bill would need to pass tight margins in the Senate. For now, we will have to wait for version two (or three, or four) to learn the real details on how many people the bill will cover—and how much it will cost.

Topics: Accountable Care Organizations (ACOs) , Executive Leadership , Medicare/Medicaid