The Senate Health Reform Bill Slashes Medicaid Severely:  Nevada Takes a Big Hit

The Senate Health Reform Bill Slashes Medicaid Severely: Nevada Takes a Big Hit


 The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter Nevada’s Medicaid program. The proposed Senate bill would change the way the federal government currently funds Medicaid by limiting federal funding and shifting cost over time to both states and Medicaid enrollees. The BCRA would subject older adults, adults with disabilities, Medicaid expansion adults, and non-disabled children under age 19 to mandatory per enrollee caps beginning in 2020. State Medicaid programs would have the option to choose between block grants and per enrollee caps for non-elderly, non-disabled, non-expansion adults.

The Senate bill would start out using the medical care component of the Consumer Price Index (M-CPI)—a measure of the average out-of-pocket cost of medical care services used by an average consumer—as the growth rate for per enrollee caps through 2020. Between 2020 and 2024, a growth rate of M-CPI plus one percentage point would be used to trend costs for older adults and adults with disabilities.  All other groups would have a growth rate of M-CPI. However, beginning in 2025, the BCRA would slash the growth rate for all populations by switching to the Consumer Price Index for all urban consumers (CPI-U)—a measure of general inflation that examines out-of-pocket household spending on goods and services used for everyday living. Importantly, CPI-U does not tie closely to medical costs—it’s common knowledge that such costs are increasing much faster than general inflation—and will not reflect population growth or the impact of aging. To be clear, none of the proposed growth factors—M-CPI, M-CPI+1, and CPI-U—keep pace with the growth in Medicaid spending. The cut would hit Nevada precisely at the time its aging population will be experiencing additional cost growth due to increasing need for services and supports.

By dramatically reducing the per capita cap growth factor beginning in 2025, we project that the Senate bill would cut between $8 billion and nearly $16 billion from total (federal and state) Medicaid spending in Nevada over the 20-year period between 2017 and 2036 for the four non-expansion Medicaid enrollment groups: older adults, adults with disabilities, non-disabled children under age 19, and non-expansion adults (children with disabilities are excluded because the BCRA does not subject them to capped funding). A cut of this magnitude threatens the viability of Nevada’s Medicaid program in unprecedented ways and will likely increase the number of people who no longer have access to essential healthcare services and critical supports. The projections do not include the proposed cuts to the adult expansion population, which would also be considerable for the state of Nevada.

Previous analysis by the AARP Public Policy Institute discusses why capping Medicaid is flawed and would leave states—and the poorest and sickest Americans—holding the bag for the shortfalls that will most certainly occur.

Table 1 shows the cumulative 20-year cuts to Medicaid by eligibility group in Nevada under the Senate health reform bill for three growth rate projections.  The bill would cap per enrollee cost growth using two measures of inflation (M-CPI and CPI-U), which are highly variable and uncertain, though will fall well short of what is needed to maintain the integrity of Nevada’s Medicaid program. It is difficult to plan for such uncertain growth rates, and reasonable projections are far apart.

We present the high, middle, and low case for M-CPI/CPI-U growth rates based on the following:

  • Low Case. Based on historical growth rates. Over the last five years (2012-2016), the M-CPI growth rate has averaged 3.0% per year, and the CPI-U growth rate has averaged 1.32% per year.

 

  • Middle Case. Based on projections from the Congressional Budget Office. CBO projects M-CPI to grow by 3.7% per year, and CPI-U by 2.4% per year.

 

  • High Case. Based on projections from 2016 CMS Medicaid Actuarial Report.  From 2019 onward, this report projects M-CPI to grow by 4.2% per year, and CPI-U by 2.6% per year.

 

In short, the lower the cap growth rate, the more severe the Medicaid cuts will be.

Table 1 above demonstrates that for any projection of the bill’s cap growth rates, the BCRA will lead to significant funding shortfalls for older adults, adults with disabilities, and non-disabled low-income children under age 19 and non-expansion adults in Nevada. The end result is that the state will be left with severe funding shortages, forcing Nevada to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of Nevada’s most vulnerable citizens will be left without access to the critical health care and long-term services and supports—like help with toileting, bathing, dressing, and eating—they rely on. Cutting between $8 billion and nearly $16 billion out of Nevada’s Medicaid program is not the way to go.

 

Susan Reinhard is a senior vice president at AARP, directing its Public Policy Institute, the focal point for AARP’s public policy research and analysis. She also serves as the chief strategist for the Center to Champion Nursing in America, a resource center to ensure the nation has the nurses it needs.

 

 

 

Jean Accius is vice president of livable communities and long-term services and supports for the AARP Public Policy Institute. He works on Medicaid and long-term care issues.

 

 

 

 

Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.

 

 

 

Ari Houser is a Senior Methods Adviser at AARP Public Policy Institute. His work focuses on demographics, disability, family caregiving, and long-term services and supports (LTSS).

 

 

 



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AARP Heads to Reno to Urge Nevada Lawmakers to Protect Patients First in National Health Reform

AARP Heads to Reno to Urge Nevada Lawmakers to Protect Patients First in National Health Reform


Health care.

It’s the reason patients, doctors, hospitals and several leading national advocacy organizations, including AARP, gathered in Reno on Wednesday morning. They were gathered to highlight concerns Nevadans have about health reform proposals being discussed in Congress, specifically the American Health Care Act (AHCA) that passed the U.S. House of Representatives in May.

“We have an urgent mission, combining our strength to implore the U.S. Senate to scrap the harmful act that the House passed on May 4th,” said President of AARP’s Board of Directors Eric Schneidewind. “We have joined forces to urge the Senate to start fresh, to create a new bill that hangs on to the hard-won health insurance protections that Americans have gained in recent years. We need a bipartisan bill that will put patients first.”

Under the AHCA, 440,000 Nevadans under age 65 (25 percent of the population) with pre-existing health conditions, such as diabetes, cancer or heart disease, could see their insurance premiums skyrocket. Additionally, the AHCA would cut $839 billion from Medicaid nationally over 10 years which would have a significant impact on Nevada residents; this includes 51,000 people ages 65 and older, 73,000 people with disabilities and 245,000 men, women and children who receive addiction treatment through Medicaid.

The groups’ top spokespeople urged Nevada lawmakers to Protect Patients First, addressing shortcomings in four key areas: affordability of insurance, access to essential care, protection for those on Medicaid and protection for those with employer-sponsored health insurance.

“Our groups have diverse interests but we share a deep concern about the dire effects of this house-passed bill,” Schneidewind says.

This is the second event of the Protect Patients First series that organizers are hosting in states across the country. The first event was held in Ohio. The groups plan to host events in Colorado and West Virginia in the weeks ahead. The hope is to get the attention of Congress to Protect Patients First and take a bipartisan approach to reforming a health care system that focuses on the health of all Americans.

For details on future health events reach out to media@aarp.org and follow @AARPMedia.



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