Senate Republicans’ last shot at tackling Obamacare would cut federal funding to all states by $160 billion through 2026, according to the latest analysis to detail major cuts under the legislation.
The cuts would also deepen to $240 billion in 2027 if the funding in the bill is not reauthorized, according to a new analysis from the nonpartisan Kaiser Family Foundation. It comes on the heels of another analysis from Avalere Health that showed the bill would cut overall funding to states by $215 billion through 2026.
Kaiser also details what states would be hurt the most from a redistribution of Obamacare funding under the legislation led by Republican Sens. Bill Cassidy of Louisiana, and Lindsey Graham of South Carolina.
The bill would take Obamacare funding for the Medicaid expansion and funding for lowering costs on the law’s exchanges and gives it to states via block grants. The bill’s proponents say states can then use those block grants to develop the plan that works for them.
Even though funding overall would be cut, some states will see increases in funding due to redistribution under the bill. It aims to cut funds to states that expanded Medicaid and give more money to states that did not expand Medicaid.
Overall, a typical Medicaid expansion state would get an 11 percent decline in federal funds from 2020-2026, while a state that did not expand Medicaid would get a 12 percent boost in funding.
Some states would see severe cuts, including New York with 35 percent, Oregon at 32 percent and Minnesota at 30 percent. In turn, six states would get at least a 40 percent bump, including Georgia with 46 percent and Tennessee with 44 percent.
Some non-expansion states get even more than that, including Texas that could see a 75 percent increase and Mississippi with 148 percent.
The co-sponsors have said the goal is to provide parity between states that did not expand Medicaid and those that did.
But Kaiser reported that even after that parity is reached there will still be severe cuts overall to the Medicaid program.
Starting in 2020, the bill installs a per-capita cap funding system for all of Medicaid, not just the expansion population. A per-capita cap would cap federal funding based on the number of Medicaid beneficiaries.
Kaiser estimated that under the plan, nearly all states would see a decrease in federal Medicaid funding by $53 billion nationwide from 2020 to 2026.
“While some states would gain funding from the Graham-Cassidy (Affordable Care Act) block grant provisions compared with current law, the Medicaid per-enrollee cap proposal would offset some or all of those gains,” Kaiser said. “Ohio, Maine, and Louisiana are states where gains under the ACA block grant provisions are fully offset by the Medicaid changes, leading to a net loss in federal funds for those states.”
Kaiser did not look into how the bill would impact coverage since each state would set up their own Medicaid and individual marketplace, making it difficult to predict full numbers.
After 2026, Kaiser expects even greater cuts to federal funding. That is because the funding must be reauthorized.
While the bill’s co-sponsors have said the funding would be reauthorized, it is hard to say what a future Congress would do.
Kaiser estimates if the funding is not reauthorized then overall federal funding would be cut by $240 billion starting in 2027.
Senate Majority Leader Mitch McConnell intends to have a vote on the bill next week. It remains unclear if McConnell has the 50 votes needed to advance the measure, with Vice President Pence casting the tie-breaking vote.
