Dump Medicaid changes in ACA repeal bill and consider them later, former CMS chiefs urge

By Harris Meyer, July 11, 2017

Two former federal health program chiefs, one a Republican, one a Democrat, have proposed a way for Senate Republicans to break through their current logjam in passing a healthcare reform bill—dropping the controversial Medicaid changes for now and considering those issues later.

Congress should separate reforms to the Medicaid program from the more pressing task of stabilizing and improving the individual health insurance market, wrote Andy Slavitt, CMS administrator in the Obama administration, and Gail Wilensky, Medicare and Medicaid chief in the George H.W. Bush administration, in a new JAMA Forum piece.

That would include deferring consideration of the GOP plan to phase out the Affordable Care Act's Medicaid expansion.

They recommend starting a 12-month bipartisan review process that focuses on long-term Medicaid reforms to improve care and reduce costs. "Congress can and should commit to improving and modernizing Medicaid, but the process will take time to develop bipartisan support for the changes that are needed and should not be rushed," they wrote.

Their proposal is in line with the view of many governors, provider and insurance groups, and policy experts that Medicaid is too big, important and complex a program to restructure within the rapid GOP time frame for passing legislation to repeal and replace the Affordable Care Act.

But Wilensky acknowledged their proposal will only get traction if Senate Majority Leader Mitch McConnell fails to round up the needed 50 GOP votes to pass his bill in the next few weeks. He announced Tuesday he is delaying the start of the August recess for two weeks to give the GOP caucus more time to reach agreement.

"I'm enough of a realist to know that if they can get the votes to do it, they'll do it now," Wilensky said in an interview.

Meanwhile, Senate GOP leaders are pushing forward with their effort to corral the votes of nearly 10 moderate and ultraconservative senators who have balked at backing the current bill. McConnell is set to unveil a revised version later this week that reportedly retains the original bill's three-year phaseout of Medicaid expansion funding. It also would keep the caps on federal Medicaid payments to the states.

The Congressional Budget Office said those changes would cut federal Medicaid spending by $772 billion, or 26%, over a decade, and by 35% in the second decade.

The revised bill reportedly will keep the ACA's Medicare payroll and investment taxes on wealthy people, with the additional revenue to be used to enhance premium tax credits for lower-income people. Part of the goal is to blunt Democratic Party attacks that the GOP bill slashes healthcare for poorer people while handing out big tax cuts to the rich.

A CBO evaluation of the revised bill is expected out early next week. McConnell had said he planned to hold a floor vote on the bill quickly after that. But his announcement that he will keep the Senate working into August suggests he may need more time to round up the votes of GOP senators reluctant to support the unpopular bill.

Slavitt and Wilensky's proposal could get a welcome reception from some moderate GOP senators, who are hearing from their governors that the GOP repeal bill's large Medicaid spending cuts would harm residents, providers and state budgets. They would like to sidestep this volatile issue.

Last month, three Republican and four Democratic governors sent a letter to Senate leaders urging them to scuttle the proposed Medicaid changes for now. The letter, whose Republican signers included John Kasich of Ohio and Brian Sandoval of Nevada, asked Senate leaders to work across party lines and address Medicaid issues everyone agrees need fixing.

Last week, Kansas Sen. Jerry Moran, usually a reliable GOP vote, said he didn't want to cut back Medicaid and questioned why that should even be included in the bill. "I have concern about people with disabilities, the frail and elderly," he said, according to the Washington Post. "Medicaid, except for the (expansion) part, is not really a part of fixing the Affordable Care Act."

In a challenge to GOP critics of Medicaid, Slavitt and Wilensky argued that Medicaid is a successful program with high beneficiary satisfaction rates, and that most Americans don't want to see it cut.

They pointed to six types of Medicaid reforms on which they think Democrats and Republicans could reach agreement. Those reforms are:

Still, a bipartisan discussion of Medicaid changes would be contentious, both authors acknowledge. For example, they themselves disagree on the desirability of the GOP proposal to convert Medicaid from an open-ended entitlement to a system of capped, per capita federal payments to the states.

But they both think passing legislation to repair the individual insurance market would be simpler with Medicaid removed from the discussion. "I'm not suggesting those are easy issues, but it's a lot easier than dragging in the entire topic of Medicaid," Slavitt said in an interview.

On the other hand, they recognize that congressional Republicans likely will be resistant for purely budget reasons to taking Medicaid out of the repeal bill. Without the big proposed Medicaid spending cuts, McConnell would have no way to pay for his bill's premium tax credits or to achieve its deficit reduction.

Even so, Slavitt and Wilensky argue that any savings from reforming Medicaid following the bipartisan review process should be invested back into the program to improve access and care, rather than being handed out in tax cuts.

"It's not reasonable to look at reforming Medicaid in terms of raising revenue for other activities," Wilensky said. "It's much too important a program to be viewed just as a cash cow."


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