Senate Recess Brings No Deal On Health Care, But CBO Talks More Medicaid Woe

June 30, 2017, Patrick Connole, Provider - Senate Republicans expect to continue negotiations over the July 4 congressional recess at the staff level as lawmakers leave the nation’s capital with no clear path to gaining the required votes to pass its version of an Affordable Care Act (ACA) repeal and replace bill.

Ahead of the recess, the Congressional Budget Office (CBO) possibly made the prospects for reaching a deal on the Better Care Reconciliation Act (BCRA) even tougher after it issued a fresh analysis of how the Medicaid funding cuts in the proposal would cut much deeper over a 20-year period versus the 10-year window in which CBO normally scores a bill.

The long term and post-acute care (LT/PAC) sector is against the Senate bill, declaring the Medicaid funding changes a real threat to the survival of skilled nursing care centers, even before the second CBO assessment came out. In the first analysis, or score of the BRCA released on June 26, the nonpartisan CBO said Medicaid spending would decline by $772 billion by the year 2026 as the federal funding outlays switched to a per-capita or block grant system and crucial growth rate formulas were implemented.

In this follow-on CBO assessment, Medicaid spending under the BRCA would be 26 percent lower in 2026 as the analysts said before, but that gap would widen to about 35 percent in 2036.

“Under CBO’s extended baseline, overall Medicaid spending would grow 5.1 percent per year during the next two decades, in part because prices for medical services would increase.  Under this legislation, such spending would increase at a rate of 1.9 percent per year through 2026 and about 3.5 percent per year in the decade after that,” CBO said.

In a separate analysis by consultants Avalere Health on the 10-year Medicaid funding reductions, the group called the Senate proposal “unprecedented.”  On average, “states that expanded Medicaid under the ACA would see a 19 percent reduction [from 2017 to 2026], compared with 8 percent for states that chose not to expand,” Avalere said.

In real dollars, the report said over a 10-year period, state funding reductions could range from $152 million to $93 billion, depending on the state.  “These figures represent direct effects of proposed BCRA provisions, and as a result do not take into account further reductions in funding that could occur as a result of state decisions to decrease enrollment,” Avalere said.

Unrelated to the Medicaid issue, Sen. Ben Sasse (R-Neb.) on June 30 wrote a letter to President Trump in which he proposed separating the repeal and replace effort if Republicans cannot strike a deal the day after they return from their July 4 recess, which would be July 11.

The idea would be to first repeal all of the ACA and then at a later date replace it with a new series of health care system reforms. It is unclear if this stance has any support in the Senate and what the details of such a plan would look like.  But, Trump did tweet on June 30 expressing his support.

Read the CBO analysis at https://tinyurl.com/ycs3g2gz and Avalere report at https://tinyurl.com/ya9nodsk.