Another day, another Congressional health bill – and the latest could have a devastating effect on the District’s budget and health coverage rates if passed. The Better Care Reconciliation Act of 2017 (BCRA), the Senate’s latest version of the House bill that passed in May, would drastically reduce federal funding for the District’s Medicaid program and potentially jeopardize coverage for hundreds of thousands of residents. Here we’ll cover how the BCRA would negatively impact Medicaid expansion, a key component of the 2010 Affordable Care Act (ACA) and a vital program in DC.
Q: What is Medicaid Expansion?
Although all states and DC have Medicaid programs, each one differs greatly in what—and who—is covered, beyond federal requirements. Under the ACA, the federal government encouraged all states to expand coverage for childless, able-bodied adults with incomes up to 138 percent of the federal poverty line (or a yearly income of about $12,000 for an individual), by offering to cover the vast majority of the cost of the expansion. The federal government would initially cover 100 percent of the costs, and would gradually reduce that to 90 percent over time, with states paying the other 10 percent. Over time, 31 states and DC chose to expand Medicaid coverage to this population.
Q: What did DC do about Medicaid Expansion?
DC was already covering this population and had been paying for it entirely with local dollars. When the ACA offered cost-sharing for Medicaid expansion, the District benefitted in two key ways:
- First, the federal government began reimbursing 90-100 percent of the District’s cost to cover childless adults up to 138 percent of the federal poverty line.
- Second, the District received approval from the federal government to be reimbursed for 70 percent of the cost to cover individuals with incomes between 138-210 percent of the federal poverty line.
Today, DC’s Medicaid expansion program covers over 80,000 adults, or about a third of the District’s total Medicaid population that also includes groups like children or individuals with disabilities.
Q: How does the BCRA affect DC’s Medicaid Expansion?
The BCRA would negatively impact both of DC’s Medicaid expansion groups. For those with incomes between 0-138 percent of the federal poverty line, the BCRA would phase out the enhanced match of 90 percent, bringing it down to 70 percent by 2024. Filling the 20 percent gap could cost the District millions of dollars.
Yet the situation for individuals in that second group would be much worse. The BCRA would end Medicaid eligibility for the childless adult population with incomes above 138 percent, effective December 31, 2017. This means all funding the District previously received from the federal government for this group wouldn’t just be phased out—it would be halted entirely, adding millions more dollars onto DC’s expenses within just a year in order to continue it.
Such changes are estimated to cost the District more than $2.6 billion over the next seven years, according to the DC Department of Health Care Finance. What’s more, the $2.6 billion doesn’t reflect other components of the BCRA that would change Medicaid – and cost DC several hundreds of millions more. If DC cannot come up with the additional funding needed to fill the enormous federal funding gap, it may be forced to reduce eligibility, services, or health care provider rates – none of which are good options.
Q: What’s happening next?
It’s difficult to say. After a failed vote on the BCRA, some members of Senate hope to hold a vote soon to repeal the ACA without a corresponding replacement bill. Given the serious financial and human impacts of altering DC’s program, every additional day with the ACA intact helps to maintain beneficiaries’ access to coverage and care—and the District’s bottom line.
