By Dennis Cooley, MD, FAAP, KAAP Legislative Coordinator
During the first week in May, the United States House of Representative passed the American Health Care Act as a first step in repealing the Affordable Care Act, better known as Obamacare. This bill was a modification of an earlier bill which failed to pass earlier this year. The new bill hardly had overwhelming support, as it squeaked by with one vote to spare. All of the Kansas House members voted on passage. So what does this mean and what would be the effect if the Senate passes a similar bill?
First, if you remember your Civics class (or School House Rock’s “I’m Just a Bill”) you know that passage by the House means it moves to the Senate for action on it. From reports in the mainstream news media, Senators are not especially happy with the House version and prominent Senators have said that they will basically start from scratch and develop their own version of health care legislation. This is hardly surprising when you consider the House bill was hastily put together, had no debate and was not evaluated by the Congressional Budget Office. Amazingly, some Representatives even admitted they voted on passage despite not having read the bill.
What does the House bill actually propose? I will hit some high points and then cover in more depth the effects on the Medicaid program and children. The House version will first and foremost eliminate taxes on the very wealthy. Some commentators have stated that this bill is really more of a tax bill than health care bill. The AHCA removes the individual mandate but allows for a 30% surcharge on the premiums if an individual becomes uninsured for more than 63 days. Older Americans are hit pretty hard. Insurance companies can charge premiums of up to three times that of younger policy holders. Older individuals may get some relief from tax credits which are based on age but these will not cover the increase in premium costs. The item that got the most press coverage was the loosening of protections on pre-existing conditions. States will be allowed to set up ‘High Risk Pools’ to help cover people with these pre-existing conditions. However, the money that was earmarked for these pools is generally considered woefully inadequate by health care policy experts. By the way, many of you may remember that Kansas had such a pool before the ACA and it did not prove to be very successful. Finally, if the new bill becomes law, states could relax requirements on essential health benefits including maternity coverage.
In my opinion, the biggest impact of this bill is the effect it would have on the Medicaid program. The Medicaid changes were reported by news outlets but coverage always seemed to center on Medicaid expansion with the adult population. There was hardly a mention of the effect on children. Here are the facts that are rarely mentioned. Children make up the biggest enrollment group in Medicaid. In states such as Kansas, this is between 60-70%. They also cost the least per enrollee. But more importantly, roughly 40% of children in this country are on Medicaid/ CHIP. Think about this. Anything that threatens the health of 40% of the children in this country will be devastating to our future. If there was an epidemic that attacked 40% of the children in this country, I can guarantee that the country would be in an uproar to find a “cure”.
If this bill becomes law, Medicaid as we know it will be changed drastically. The bill caps federal dollars to the states by instituting ‘Caps per Capita’ block grants or lump sum block grants. The amount the federal government will send in these block grants will be based on the states’ Medicaid expenditures for the year 2016. There will be a small inflationary factor that will increase payments yearly. In the ‘Cap per Capita’ grants there would also be adjustments for enrollment. In both grant forms there are no adjustments for increases in health care costs. There are no adjustments for public health emergencies such as epidemics. There are no adjustments for increased health costs in wide spread natural disasters. The money the states get in either grant program will be sent for the state to use at its discretion. In other words, children, the disabled and the dual elderly will be fighting for the dollars.
Make no mistake this is an attempt to defund Medicaid. The CBO projects that the Federal government will save $880 million dollars over 10 years if this takes effect. In other words, states will have to divvy up $880 million dollars to keep their Medicaid programs running at their current levels. As federal money for the program dwindles, states will have to kick in more dollars. If a disaster occurs or an epidemic happens it will be up to the states to cover the costs. How realistic is it for a state such as Kansas, with fiscal woes, to be able to do this? You and I know what will happen. Services will be cut, enrollment decreased, and provider payments slashed. And who do you think will be most subjected to these cost cuts? My guess is children and pediatricians.
There are large amounts of data that look at the outcomes of the Medicaid program since its inception 50 years ago. Georgetown University recently reviewed this data. It found that children on Medicaid became healthier adults, achieved better academic results, and had greater economic success. Hardly news to pediatricians. But I bet it is big news to the American public. My hope is the Senate will rewrite this legislation and allow Medicaid to continue to provide health care for children in this country. If they don’t, we all will suffer in the long run.
