Republican Senators pretend people who get kicked off of Medicaid will just start buying insurance

Senate Republicans are trying (and failing) to justify cuts to Medicaid.

Senate Majority Leader Mitch McConnell of Ky., center, followed by Majority Whip John Cornyn, R-Texas, leaves a Republican meeting on healthcare. CREDIT: AP Photo/Jacquelyn Martin
Senate Majority Leader Mitch McConnell of Ky., center, followed by Majority Whip John Cornyn, R-Texas, leaves a Republican meeting on healthcare. CREDIT: AP Photo/Jacquelyn Martin

The day after the Senate’s draft health bill was released, supporters looked to defend a key component of bill: cuts to Medicaid. Republican lawmakers will need to answer to its beneficiaries, who’ve grown dependent on this program for coverage.

On Friday, Senator Bill Cassidy (R-LA) on Morning Joe reconciled the Senate’s Medicaid cuts the following way: “If Medicaid expansion goes away and if there is no coverage, that’s a bad thing, Willie. On the other hand, if they move from Medicaid to private insurance, that could be a good thing.”

Cassidy claimed that Medicaid enrollees could join the individual marketplaces, which have been doing poorly because not enough people are opted in. They’ll be able to afford such plans with tax credits, which he characterized as “more generous” than the House.

Senate Rand Paul (R-KY), who does not support the bill as it currently stands, also appeared on the show and said he would like to “legalize inexpensive insurance,” and ultimately have Medicaid patients go on “inexpensive” plans — likely private plans.

Both senators believe that Medicaid enrollees could obtain coverage elsewhere. But health experts say Medicaid enrollees will likely forgo coverage altogether under the Senate Republicans’ health care bill, leaving them uninsured.

The Senate Republicans’ Better Care Reconciliation Act (BCRA) ends Medicaid expansion by 2024, and also makes additional cuts to the overall program starting in 2025. The entire Medicaid program as Americans know it could end, and for many Republicans, that’s the entire idea. Medicaid overhaul has been a point of motivation for health care reform. House Speaker Paul Ryan (R-OH) had previously told the National Review that he has been dreaming about making cuts to the Medicaid program since his keg-days in college.

The Senate bill, like the House bill, looks to undercut the Medicaid program in the following way: the current model, which is an open-ended commitment to states to pay most Medicaid enrollee’s bills, would become a per capita cap system. Under this system, states can get a lump sum from the government for each enrollee or request a block grant. The Senate bill breaks away from the House version of the bill after 2025. At that point, the rates at which the federal government assists states changes and becomes tethered to the consumer price index. The adjusted growth rate funds less than what Medicaid requires and could lead t0 a non-functioning program, according to the Urban Institute.

Tax credits under BCRA will not be helpful to Medicaid beneficiaries, Tara Straw, senior health policy analyst at the Center on Budget and Policy Priorities, told ThinkProgress.

Under the Senate bill, premiums tax credits are based on income, age, and geography. Cassidy is right in that credits under the Senate are more generous than the House, which is based solely on age. However, the Senate bill changes the Obamacare formula for credits, making them less generous. The Senate plans are set up like bronze plans under Obamacare. Essentially, plans would see lower monthly premiums but raises costs when patients need care. And deductibles — the amount of medical costs patients pay themselves before the insurance plan starts to pay — could become more expensive. A median bronze plan deductible is $6,300, said Straw. Under the senate bill, cost sharing reductions — that help pay for out-of-pocket costs are repealed by 2020.

Straw says that even if Medicaid patients agree to funnel 2 percent of their income to pay for these insurance plans, the plans cover less because states could waive coverage requirements.

When Cassidy says Medicaid enrollees will see lower premiums under the Senate’s restructure, that’s likely true. But what he neglects to mention is that patients will instead see expensive co-payments and deductibles.

“Someone could scrap to pay for premiums. But could they ever use?” asked Straw, “No because deductibles.”

The way that Medicaid is restructured under the Senate and House bill, states will likely not be able to front the Medicaid costs, and the program will likely shrink due to inadequate funds. Advocates, like Speaker Ryan, say per capita caps give states the “flexibility” to support low-income populations. But a policy perspective published in the New England Journal of Medicine, suggests the per capita caps in Medicaid “would result in restrictions on coverage and benefits rather than state innovations to reduce program costs.”

The authors base their analysts on previous existing financing systems that resemble the House and Senate restructure. Analysis on 1950s welfare programs show that tight squeezes on states would incentivize states to cut people off the entitlement program.

What happens to the 70 million people on Medicaid? Under the House plan, the Congressional Budget Office (CBO) projects that 14 million Medicaid beneficiaries will likely become uninsured. Next week, the public will learn how many million people will be affected under the Senate’s plan.