Obamacare Replacement Makes Medicaid a Block Grant

Sarah Kliff: Obamacare Repeal, Medicaid Block GrantOne of the main ways that Obamacare increased insurance coverage was by expanding the Medicaid program to cover millions more low-income Americans. Prior to the health law, the entitlement was restricted to specific groups of low-income Americans (pregnant women, for example, and the blind and disabled).

Obamacare opened the program up to anyone below 138 percent of the poverty line (about $15,000 for an individual) in the 31 states that opted to participate.

Initial GOP plans would have ended this coverage expansion outright — but in a big reversal, the replacement bill will allow Medicaid expansion to continue through January 1, 2020. States will be able to continue to enroll people in the program. States that haven’t expanded yet but are considering the option could join the Medicaid expansion, and enroll people over the same time period as well.

In 2020, enrollment in the Medicaid expansion will “freeze” and states will no longer be able to sign new enrollees up for the program. Legislators expect that enrollment would slowly decline, as enrollees’ incomes change and they shift off the program…

There are significant changes to Medicaid in the American Health Care Act outside of the expansion, too. This bill would convert Medicaid to a “per capita cap” system, where states would get a lump sum from the federal government for each enrollee.

This is different from current Medicaid funding. Right now, the federal government has an open-ended commitment to paying all of a Medicaid enrollee’s bills, regardless of how high they go.

Previous analyses of different version of this proposal suggest it could lead to very deep cuts to Medicaid. It’s unclear, at this point, how much this new version of the policy would reduce Medicaid spending.

–Sarah Kliff
The American Health Care Act: The Republicans’ Bill to Replace Obamacare

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