Health Provision in New Tax Bill:  Higher Premiums and Loss of Health Coverage for Older Adults

Health Provision in New Tax Bill: Higher Premiums and Loss of Health Coverage for Older Adults


Thought the debate over the health law was over? Not quite. Yes, Congress has shifted its focus from health care to tax reform over the past couple months. But health care faces new threats under the latest proposed tax legislation.

The Tax Cuts and Jobs Act as reported by the Senate Finance Committee on Nov. 16, 2017 includes a new provision that would both reduce health care coverage and increase costs for millions of Americans. Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of $1,500 in 2019 as a result of the bill.

Older Adults Would Face Higher Premiums

The new provision in the Senate tax bill effectively eliminates the current health law’s requirement that most people have health insurance coverage. Lawmakers are inserting this change into the tax debate to help pay for other changes they want to make to the tax code.

Unfortunately, this change will mean higher premiums for everyone who needs to purchase coverage on the individual (non-group) health insurance market. The non-partisan Congressional Budget Office (CBO) estimates that premiums will increase by an average of 10 percent, thanks to the pool of people continuing to purchase health insurance coverage being less healthy on the whole.

The impact will be especially hard on older adults, who will see the largest price increases even though they already pay premiums up to three times higher than others. As a result of the tax bill, for federal Marketplace coverage in 2019*:

  • Premiums for 50-year-olds could increase by an average $890, rising to $9,780 a year.
  • Premiums for 55-year-olds could increase by an average $1,110, rising to $12,200 a year.
  • Premiums for 60-year-olds could increase by an average $1,350, rising to $14,860 a year.
  • Premiums for 64-year-olds could increase by an average $1,490, rising to $16,420 a year.

 

Actual premium increases will vary by state, with some states seeing much higher increases for older adults. In Maine, a typical 64-year-old could see her premiums increase an average $1,750 a year (to $19,220), while in Alaska, she could see her premiums increase an average $2,150 a year (to $23,650).

13 Million Fewer Americans Would Have Health Insurance Coverage

Eliminating the health care coverage requirement would also mean that millions more Americans will become uninsured. CBO has estimated that 4 million people under age 65 would no longer have health insurance coverage as early as 2019 if this provision is enacted. By 2027, that number would rise to 13 million people left without coverage.

Since enactment of the ACA, the uninsured rate for 50- to- 64-year-olds has fallen significantly, from 15% in 2013 to 9% in 2016. The Senate tax bill provision threatens to reverse these critical coverage gains, meaning a harmful step backward for older adults.

The bottom line – the new health care provision in the Senate tax bill will increase premiums for older adults and lead to millions more uninsured.

 

* Calculations by AARP Public Policy Institute

 

 

Jane Sung is a senior strategic policy adviser with AARP’s Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, Medicare Advantage, Medigap, and employer and retiree health coverage.

 

 

 

 

 

Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on a wide variety of health-related issues, with an emphasis on public health, health disparities, and private coverage.

 

 



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The Senate Health Reform Bill Slashes Medicaid in North Dakota: State Could Face Cuts Up to $7 Billion

The Senate Health Reform Bill Slashes Medicaid in North Dakota: State Could Face Cuts Up to $7 Billion


The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter North Dakota’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 North Dakota precisely at the time its aging population will be experiencing additional cost growth due to increasing need for services and supports. The projections do not include the proposed cuts to the adult expansion population, which would also be considerable for the state of North Dakota.

By dramatically reducing the per capita cap growth factor beginning in 2025, we project that the Senate bill would cut between $3 billion and $7 billion from total (federal and state) Medicaid spending in North Dakota 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 North Dakota’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.

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 North Dakota 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 North Dakota’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  in North Dakota. The end result is that the state will be left with severe funding shortages, forcing North Dakota to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of North Dakota’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 $3 billion and $7 billion from North Dakota’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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The Senate Health Reform Bill Slashes Medicaid Severely: Alaska Takes a Big Hit

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


The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter Alaska’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 Alaska 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 $7 billion and $13 billion from total (federal and state) Medicaid spending in Alaska 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 Alaska’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 Alaska.

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 Alaska 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 Alaska’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  in Alaska. The end result is that the state will be left with severe funding shortages, forcing Alaska to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of Alaska’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 $7 billion and $13 billion from Alaska’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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The Senate Health Reform Bill Slashes Medicaid Severely: Colorado Takes a Big Hit

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


The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter Colorado’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 Colorado 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 $23 billion and $45 billion from total (federal and state) Medicaid spending in Colorado 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 Colorado’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 Colorado.

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 Colorado 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 Colorado’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  in Colorado. The end result is that the state will be left with severe funding shortages, forcing Colorado to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of Colorado’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 $23 billion and $45 billion from Colorado’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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The Senate Health Reform Bill Slashes Medicaid Severely: West Virginia Takes a Big Hit

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


The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter West Virginia’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 West Virginia 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 $16 billion and $29 billion from total (federal and state) Medicaid spending in West Virginia  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 BCRA does not subject them to capped funding).

One provision of the BCRA—called an equity adjustment —would further cut Medicaid for older people and low-income non-disabled adults in West Virginia by 0.5 to 2 percent per year on top of the draconian cuts imposed on all states. The intent of the equity adjustment is to address disparities in state Medicaid spending. However, a cut of this magnitude threatens the viability of West Virginia’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 West Virginia.

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 West Virginia 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 West Virginia’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, BCRA will lead to significant funding shortfalls for older adults, adults with disabilities, and non-disabled low-income children under age 19  in West Virginia. The end result is that the state will be left with severe funding shortages, forcing West Virginia to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of West Virginia’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 $16 billion and $29 billion from West Virginia’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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The Senate Health Reform Bill Slashes Medicaid Severely: Maine Takes a Big Hit

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


The Better Care Reconciliation Act (BCRA) now under consideration in the Senate would drastically alter Maine’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 Maine 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 $13 billion and $26 billion from total (federal and state) Medicaid spending in Maine 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 Maine’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.

Previous analysis by the AARP Public Policy Institute discusses why capping Medicaid is flawed and would leave state—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 Maine 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 Maine’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  in Maine. The end result is that the state will be left with severe funding shortages, forcing Maine to cut eligibility, provider rates, or covered services—or very likely all three. Moreover, many of Maine’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 $13billion and $26billion from Maine’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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