GOP ObamaCare repeal takes new step in nixing Medicaid expansion

The Senate GOP’s last-ditch effort to repeal ObamaCare goes farther than past bids to rein in the law’s Medicaid expansion, barring states from extending the expansion past 2019 even if they use their own money.

An earlier GOP repeal bill would have let states keep the program, but that is eliminated under the legislation crafted by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.), which could come up for a Senate vote next week.

“The expansion group is gone even as an option,” Sara Rosenbaum, a professor at George Washington University and Medicaid expert, wrote in an email. “This is why it is so much more radical.”

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The effect of the provision would be that states would face hurdles in providing a new form of coverage to people currently on the Medicaid expansion.

Even using funding under new block grants in the bill, states would have to set up an entirely new program, with new staff, computer systems and more, to provide coverage, experts say. States would have just two years to make that happen, before changes took effect in 2020.

“To start afresh would mean creating a whole new infrastructure to cover people, which would really tax states administratively,” said Barbara Lyons, a Medicaid expert at the Kaiser Family Foundation.

Republicans supportive of the bill argue it would allow states to create a new program similar to Medicaid expansion if they wished.

“Yes this bill ends Medicaid expansion, BUT the money states would have received for their Medicaid expansion will be included in their block grant,” Ty Bofferding, a spokesman for Cassidy wrote in a statement. “So if a state wished, they could use that money to create a system that works like the expansion.”

However, that contention is disputed by several health policy experts, who warn that the block grants would not be enough to allow states to truly replicate the Medicaid expansion.   

Aside from the logistical challenges, there simply could not be enough money to recreate Medicaid expansion under the block grants. The proposal shifts money away from states that expanded Medicaid and towards those that did not.

“The block grants are going to have less money because the funding is reduced, and they’re redistributing the money from expansion states to non-expansion,” Lyons said.

Republican governors from states that expanded the state-federal health program for the needy – including from Nevada, Ohio, Massachusetts and Vermont – are pushing back on the proposal.

Ohio, for example, would get $9 billion less, and Nevada would get $2 billion less, according to a study from the consulting firm Avalere.

Lyons said that people currently on Medicaid expansion would face difficulty affording other coverage once that went away.

“It’s highly likely that they would become uninsured,” she said.

A spokeswoman for Sen. Dean Heller (R-Nev.), who is facing a tough reelection race and has spoken in defense of his state’s Medicaid expansion, argued states could use the block grants to create a new program essentially mimicking the Medicaid expansion.

“Nevada has the option to replicate its Medicaid expansion program using the block grant dollars,” the spokeswoman, Megan Taylor, said in a statement. She said the new program would simply have a different name than Medicaid, meaning the debate boils down to a “war of words.”

Sens. Shelley Moore Capito (R-W.Va.) and Lisa Murkowski (R-Alaska) have also spoken in defense of Medicaid expansion.

Their offices did not respond to requests for comment on Graham-Cassidy’s effects on Medicaid.

Murkowski is a particularly key vote on the bill, given she was one of the three Republican Senators who helped doom the July proposal.

She has said she is still studying numbers for the bill’s effect on Alaska.

A spokesman for Sen. Rob Portman (R-Ohio), who has been protective of his state’s Medicaid expansion, defended Graham-Cassidy, as Heller’s office did.

“Governors will have access to the funds that were used for Medicaid expansion and will be able to continue to cover that population if they so choose,” the spokesman said.

Judy Solomon, a Medicaid expert at the left-leaning Center on Budget and Policy Priorities, though, said that while states could try to create a new program to cover people currently on Medicaid expansion, a lack of funding would pose a problem. 

“You could do that, but it would not go far enough to cover all the people you’re covering now and that you would need to cover in the future,” she said.

In addition, the new block grants would not grow to account for factors like more people signing up, in the way that the current, open-ended Medicaid expansion does.

Republicans, though, argue that money that states currently spend on Medicaid expansion would also be freed up and could be spent on the new program to provide coverage.

Lanhee Chen, a right-leaning health policy expert at the Hoover Institution, defended the cuts for Medicaid expansion states by saying they created equal funding among all states.

“Critics complain that the bill’s block grants would cut funding to states that took ObamaCare’s Medicaid expansion,” he wrote in The Wall Street Journal. “But the goal of the legislation is to create funding parity, regardless of how states implemented ObamaCare.”