Congressional plans to scrap the Affordable Care Act and revamp Medicaid could cost the District over a billion dollars in just a few years—with costs continuing to rise every year—which in turn would jeopardize the District’s efforts to expand Medicaid and provide near-universal health coverage. If anything like the House bill passes the Senate, it would be devastating to DC residents and our city’s finances.
The American Health Care Act (AHCA) was passed by the House in May to replace the Affordable Care Act (ACA), with dramatic consequences for Medicaid. It drastically cuts program spending over 10 years in a two-part punch: by changing the way the federal government shares Medicaid costs with DC, and by ending enhanced funding DC has received under the ACA to expand Medicaid to able-bodied adults without children.
DC and the states currently share the cost of their Medicaid programs with the federal government, and DC receives 70 cents for every dollar it spends. The ACA allowed the District to expand Medicaid to adults without children who are not elderly or disabled—who previously had not been eligible—with the federal government paying 90 percent. This would change in fundamental ways under the House bill.
First, it would end the enhanced funding for DC’s Medicaid expansion. Beginning January 2020, the federal government would only pay DC’s regular matching rate, 70 percent, instead of 90 percent for any new Medicaid expansion enrollees.
Second, it would end federal Medicaid funding entirely for 13,000 of the 80,000 people who are currently covered by DC’s Medicaid expansion. That’s because the ACA generally allowed states to expand Medicaid coverage for able-bodied adults without children with incomes up to 133 percent of the poverty line (or individuals with incomes at $16,040 or less) but the District received federal permission to extend this, covering individuals with incomes up to 210 percent of the poverty line (or those making up to $25,330). Under the AHCA, DC would get no federal funds for residents with incomes between 133 percent and 210 percent of the poverty line.
But there’s more. Over time, the AHCA also would ultimately end the practice of reimbursing DC based on share of expenses and instead provide a fixed amount per person, or per-capita-cap. This would leave DC on the hook to cover additional or unexpected expenses – which is especially problematic if health care costs rise faster than the capped amount adjusts for. And the costs to DC would be expected to rise over time as the gap between actual health costs and capped federal funding grows.
All of these changes leave DC to foot an ever-increasing bill, and the additional costs to DC just to maintain its full Medicaid expansion would be over $1.5 billion between fiscal years 2018 and 2024, according to the DC Department of Health Care Finance.
With these kinds of financial constraints, DC would have three choices: devote far more local dollars to the Medicaid program, limit Medicaid enrollment, or reduce Medicaid benefits. None of these options would bode well for District residents, and it could critically increase the number of uninsured.