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Medicaid, cost-sharing concerns dominate healthcare funding debates

While the issue of rising costs of prescription drugs resurfaced again on Capitol Hill June 8, cuts to the Medicaid program and uncertainty over whether the Trump administration would continue making cost-sharing reduction payments to insurers dominated the debates and discussions.

Lawmakers from both sides of the aisle sought answers from Health and Human Services Secretary Tom Price about where the Trump administration stood on those matters during two separate hearings convened by the Senate Finance and the House Ways and Means committees.

At the Senate Finance hearing, Sen. Dean Heller, R-Nev., who is considered a key vote on his chamber's yet-to-be-revealed healthcare bill, said legislation passed May 4 by the House would lead to a "$250 million hole" in his state's Medicaid budget.

A handful of other Republican senators, including Susan Collins of Maine, Rob Portman of Ohio, Shelley Moore Capito of West Virginia and Lisa Murkowski of Alaska, have also raised concerns about the impact to Medicaid under the House bill.

The Congressional Budget Office estimated Medicaid would lose $834 billion under the House bill, resulting in 14 million fewer people enrolled by 2026 in the program, which provides insurance coverage for low-income Americans.

But Price disputed the CBO's estimates.

He also said the $610 billion reduction over 10 years to Medicaid reflected in Trump's 2018 budget would come from slowing the cost growth rate of the program by imposing per capita caps and using block grants.

Under per capita caps, federal funding per enrollee would be capped, while under block grants, states would receive a pre-set amount of funding for Medicaid.

Heller pressed Price on what the administration and Republican leaders had in mind for the growth rate in estimating the per capita caps for Medicaid, saying that he had not been able to get answers during the closed-door sessions his party has been holding to hash out the Senate bill.

Price initially denied Trump's budget assumed enactment of the House ACA repeal bill, but later acknowledged the $610 billion savings estimate was based on the per capita caps and the block grant options included in the legislation.

Mick Mulvaney, director of the White House Office of Management and Budget, has also repeatedly said Trump's budget assumed passage of the House bill.

Handling impact on states

Sen. Michael Bennet, D-Colo., said his state's Medicaid program would lose up to $700 million if the Republicans' proposal is adopted. He asked Price how Colorado should handle the situation, given nearly half of the state's Medicaid beneficiaries are children and more than 40% are disabled and elderly Americans, many of whom live in nursing homes.

The other Coloradans on Medicaid are people who work but still cannot afford health insurance on their own, with only a "tiny residual percentage" not fitting into any of those categories, the senator said.

Price said the "constellation of programs" he envisioned under the Republicans' healthcare bill would involve a "system that actually responds to those folks and individuals who find that it's better for them not to be covered on the Medicaid system but a system that is actually more responsive."

But Bennet said the notion that Americans who cannot afford coverage were "somehow magically going to be able to buy health insurance under a system that would no longer regulates the insurance industry" was "not believable in any respect."

Sen. Bob Casey, D-Pa., grilled Price over what the lawmaker said were "deliberately misleading" statements the HHS chief made in recent months about the proposed cuts to Medicaid in President Donald Trump's fiscal year 2018 budget request and a bill passed May 4 by the Republican-dominated House to repeal the Affordable Care Act.

Casey noted Price had told NBC's Meet the Press in March that "nobody will be worse off financially" under the House bill, and in May, he said on CNN's State of the Union there were "absolutely not" going to be any cuts to Medicaid in the legislation, dubbed the American Health Care Act.

Price told the senators he stood by those statements.

Slower end to Medicaid expansion

Other talk on Capitol Hill on June 8 revolved around having a slower end to the ACA's Medicaid expansion, phasing out the funding over seven years, an idea Heller told reporters he supported.

But analysts at the nonpartisan Center on Budget and Policy Priorities said delaying the end of the ACA's expansion, which gave states the option to extend Medicaid coverage to low-income adults with income under 138% of the federal poverty line, or about $24,600 for a family of four in 2017, would still "reverse the historic gains in health coverage and access to care that have been made under the expansion."

Sen. Debbie Stabenow, D-Mich., asked Price why he had put off giving healthcare insurers a definitive answer on whether the administration would continue making the ACA cost-sharing reduction payments, which help cover deductibles and copayments for about 7 million low-income Americans enrolled in plans offered by private insurers through the government-run marketplace.
Stabenow stressed that creating uncertainty and instability in the healthcare marketplace was akin to sabotaging the ACA, a claim Price disputed.

"Nobody is interested in sabotaging the system," he said.

But Stabenow pointed out that health insurers had either dropped off the ACA marketplaces or had threatened to do so because of the uncertainty and she said the instability was expected to lead to higher premiums.

Republican Kevin Brady of Texas, chairman of the House Ways and Means Committee, backed Stabenow on that warning, declaring during an afternoon hearing that "we must work together to deliver an expedited solution to help stabilize the insurance market."

Brady said Congress should immediately act within its constitutional authority to temporarily and legally fund the cost-sharing reduction payments.