Reconciliation and health care

Congress is currently working through the reconciliation process—including drafting legislation that will only require a simple majority for Senate approval—that will dramatically cut government spending. While the rule for reconciliation is different in the House and the Senate, an early House version of the bill would cut spending by $880 billion, and a significant portion of those cuts are expected to come from health care related spending.

Experts in Brookings’ Economic Studies program have explored some of the potential cuts and their impacts in a number of new analyses. Explore key takeaways below and follow the links to the full reports.

How do Republicans plan to cut health coverage? Two basic ways.

Matthew Fiedler and Loren Adler

9.5
million

The number of people who will lose their health insurance by 2034 under proposed House Republican policies, according to Congressional Budget Office analysis.

“… the overall story is simple: The plan saves money mainly by removing millions of people from coverage, while offering no alternative means to insure them.”

Read more in The Washington Post

How proposed changes to Medicaid are expected to impact near-elderly Americans

Gopi Shah Goda, Lily Nevo, and Richard G. Frank

Key Takeaways:

Estimates suggest that achieving the dramatic spending reductions Congress is aiming for in reconciliation will require cuts to Medicaid, which serves lower-income adults and children through a combination of state and federal funding.
The authors show how two types of potential cuts—lowering the federal matching rate for the Affordable Care Act Medicaid Expansion and implementing work requirements—would be especially harmful to 50-64 year-olds, who are less likely to be able to work and more likely to have existing or emerging health issues.
- Reduction in federal cost-sharing would result in “trigger laws” in some states that automatically end the Medicaid expansion and make it unaffordable in others, leading to over 3 million 50-64 year-olds likely losing coverage.
- Evidence from the states and other programs suggest that work requirements would significantly reduce insurance enrollment without boosting employment, and these impacts are likely to be larger for this population.

What Medicaid and other safety net cuts could mean for US poverty

Robert Greenstein

“40 years ago, one of every four children in America, about 25%, had no health insurance, today it’s 5%. Among the population as a whole, the share of the population that’s uninsured has been cut in half primarily because of the Affordable Care Act enacted back in 2010. And I think this is particularly relevant because if we cut deeply into the key programs that underlie this progress like Medicaid and SNAP—which we used to call food stamps—then I think it’s inevitable that we will see a reversal of a substantial part of the progress. We’ll see poverty go back up, and we will clearly see, if you cut Medicaid substantially, you’re going to have millions more people who lack health insurance. So that’s part of the issues and the concern with the reconciliation process upon us.”

Listen

Screencap of The Current podcast with Bob Greenstein

Robert Greenstein joined Brookings’ “The Current” podcast to discuss the potential impact of cuts to safety net programs resulting from the reconciliation process.

How would implementing an Arkansas-style work requirement affect Medicaid enrollment?

Matthew Fiedler

In June 2018, Arkansas received a waiver under the first Trump administration to implement a work requirement for some people receiving Medicaid benefits, which is similar in some respects to the requirement being considered in reconciliation.
Based on the Arkansas experience, Fiedler estimates that a similar federal work requirement would reduce Medicaid enrollment by an estimated 27% at the end of the policy’s first year and by 34%, on average, over the long run.
Fiedler notes that other research examining Arkansas’ experience has found that most enrollees lost coverage due to challenges in reporting information to the state, not true non-compliance with the policy, and that policy did not increase employment.

Understanding Marketplace “Silver Loading”

Christen Linke Young

During the first Trump administration, the federal government stopped reimbursing insurance providers for cost-sharing reductions that were an element of the Affordable Care Act that reduced health care costs for low-income people.
Insurance companies were able to adapt through a system known as “silver-loading,” described in detail by Young.
Congress is now considering changing its policy again in a way that would end silver-loading, which has been a net benefit for consumers.
Specifically, changes in financing for the ACA’s cost-sharing reductions would raise premiums sharply for middle-income people.
If this proposal were incorporated into the final law, a hypothetical couple earning $62,000 per year would see premiums for gold coverage rise by $350 per month.

“… resuming CSR payment without reinvesting the savings, as House lawmakers appear to be considering, would sharply increase what many middle-income Marketplace enrollees pay for their health insurance coverage.”

Read more