The Senate healthcare bill would reduce Medicaid spending by 35 percent over the next two decades, according to an estimate from the Congressional Budget Office.
The CBO estimate released Thursday aims to provide a longer view of how the Senate bill’s Medicaid reforms would affect the low-income healthcare program. It is in addition to an earlier score that found the bill would cut Medicaid by $772 billion through 2026.
The CBO found that Medicaid spending would grow 5.1 percent each year under current law over the next two decades partly because healthcare costs will continue to increase.
However, under the Senate bill, Medicaid spending would increase only 1.9 percent per year through 2026 and about 3.5 percent per year in the decade after that, the CBO said.
The reason is that the Senate bill would convert Medicaid funding to the states starting in 2021 to a fixed amount in a block grant or a fixed amount per Medicaid beneficiary in a per capita cap. It also would cap Medicaid’s growth rate starting in 2020.
The bill would keep Obamacare’s Medicaid expansion but significantly cut funding for the program.
Overall, the CBO projects that the spending cuts would save the federal government $160 billion in 2026 compared to current law. CBO didn’t say how much it would save over the extra decade.
Normally, the CBO makes estimates only over a decade because estimating further out has greater uncertainty. CBO said many changes could occur to Medicaid in 20 years, such as people’s health and changes in state decisions on Medicaid eligibility.
Some experts have said that less federal funding could lead to more costs for states and changes in Medicaid eligibility to compensate.
The new estimate, which was requested by Senate Democrats, did not look into the impact on insurance coverage. An estimate on the bill released Monday found that 14 to 15 million people could lose Medicaid coverage by 2026.
It is not clear what the bill’s Medicaid reform will look like in its final version. Several centrist Republicans are dismayed at the extent of the cuts and some have suggested changing the growth rate.
