The U.S. Senate is set to take up a fundamental upending of federal health care law as soon as next week, a move that threatens to turn the lives of hundreds of thousands of Georgians upside down.
Senators released their version of a health care bill, the Better Care Reconciliation Act of 2017, late last month. Like the House health care bill, the Senate bill shrinks health care funding in the state and leaves more Georgians with higher health care costs and fewer benefits. Approximately 400,000 more Georgians would be uninsured in 2022 under this bill—a 21 percent increase.
The Senate version differs somewhat from the House version, such as the way it modifies the structure of the subsidies in the individual insurance marketplace. But almost all of these modifications will cause Georgians to lose health coverage or pay more for less comprehensive coverage.
The Senate health bill retains the House bill’s proposed cap on Medicaid funding, probably the most worrisome provision in both plans. The cap sets up a nationwide cut of $772 billion from Medicaid over 10 years leading to a 25 percent reduction in 2026. The Senate bill squeezes Medicaid even more starting in 2025 by lowering the rate of growth in the capped amount states can receive each year. This change is projected to result in a 35 percent cut to Medicaid by 2036. The Senate bill also proposes to increase the capped funding amount for low Medicaid spending states like Georgia. Even with this increase, health care costs for Medicaid beneficiaries are projected to grow at a faster rate than medical inflation and this effectively reduces federal Medicaid dollars in Georgia in the long run.
Georgia stands to lose $1.88 billion in federal Medicaid funding between 2020 and 2026 in the Senate proposal, according to a study from Avalere Health. This is a 7 percent reduction compared to the federal funding Georgia would receive in that time period under the current health law. The reduction in federal dollars only gets larger after 2026 under the Senate’s proposal to reduce the annual rate of increase in the federal cap. To make up for this loss in funding, Georgia could cut Medicaid benefits or limit eligibility for services. Which services and benefits the state would choose to restrict is an open question. Georgia provides some optional services in addition to the Medicaid benefits required under federal law. These optional services include home and community-based waiver programs, which are at a greater risk. Home and community-based services are already limited, with thousands of Georgians on the waiting list to receive support services that help people with disabilities live in their communities instead of an institution.
Georgians who receive private insurance through the marketplace or their employer are also at risk of rising costs and shrinking protections under the Senate bill. The House bill based marketplace subsidies solely on age, but in the Senate version they are based on income as is now the case. Most Georgians, especially seniors, would be expected to pay a higher share of their income for premiums. Their subsidy amount will also be based on a plan that covers less of their health care costs. As a result, more Georgians could be forced to drop coverage because they’d find the higher deductibles and premiums unaffordable. Georgians with employer-based health plans could again see lifetime limits or fewer services covered. The Senate bill gives states more power to opt out of protections such as essential health benefit standards. These protections are vital for people with pre-existing conditions, whose needed services can be excluded from plans if essential health benefits standards are waived.
Solutions to improve the Affordable Care Act are the better option to bring greater stability to the individual insurance market. These solutions include fully funding reinsurance programs and the cost-sharing subsidies. The Senate bill provides some funding for reinsurance programs, but ends funding for cost-sharing subsidies in 2020. Gutting Medicaid, reducing subsidies and removing protections does not repair what needs fixing in the Affordable Care Act. It is critical for Senate leaders to take time to ensure the fundamental structure of Medicaid remains intact and that there is adequate funding and protections to support a stable marketplace.