By now, you’ve already seen the key takeaways from the Congressional Budget Office (CBO) score of the Senate repeal bill. But what you might not know is that the CBO score hides the most devastating of the Senate bill’s effects. Indeed, the CBO score only shows the tip of the blade that will continue to slash into Medicaid for decades to come.
According to the CBO’s analysis released yesterday, over the period of 2017-2026, the Senate’s repeal bill would:
- Cause 22 million people to lose their health care coverage by 2026
- Cut $772 billion from Medicaid – slashing its funding by 26 percent, and blowing a hole in state budgets which would likely lead states to cut essential programs and services for seniors, people with disabilities and children.
- Slash the subsidies available to low- and moderate-income families by $408 billion, and leave families exposed to far higher out-of-pocket costs.
- Eliminate the Medicaid expansion that covered millions and replace it with private coverage that the CBO says would become so expensive they would not be able to afford it. For example, a person earning $11,400 would face a deductible of more than half their annual income.
- Lead close to half the population to lose access to critical services, such as maternity care and treatment for substance use disorders
- All this, just to finance tax cuts for the wealthy.
But the CBO score hides the worst of the Medicaid cuts, because its projections stop in 2026 – just as the Medicaid cuts begin to sink even deeper.
Starting in 2020, the Senate bill would cap the federal contribution to states’ Medicaid programs and would force it to grow at a rate that is slower than per capita Medicaid costs (the Consumer Price Index – Medical (CPI-M) inflator for most enrollees and CPI-M plus 1 percentage point for disabled adults or age 65 or older.) Since CBO projects per capita costs of non-disabled children and adults to rise at 4.9% – but CPI-M will only be 3.7% – this change alone would result in significant reductions in states’ Medicaid funds.
But starting in 2025 – at the very end of the CBO score’s time period – the Senate bill would make far deeper cuts in Medicaid by dramatically slowing the growth of the per capita caps for all enrollees to Consumer Price Index for all urban consumers (CPI-U). The CBO projects CPI-U to grow only at 2.4% annually over this time period, while costs of non-disabled children and adults will rise at more than twice that rate.
This shift would push dramatically more costs onto states, but conveniently (for the Senate GOP leadership) it is barely captured at the tail end of the CBO’s 10-year score window. And it exemplifies how converting Medicaid into a capped funding program merely creates a dial that Congress could ratchet up for additional savings every time it needs to pay for another priority. (We already saw this in the Trump budget where they sought to add hundreds of billions of dollars in cuts on top of those that were in the House’s version of ACA repeal.)
This massive cost-shift to states would only grow year after year. It would force states to eliminate life-saving services for children with special health care needs. It would deprive people living with disabilities of the services they need to live independently and it would shift new costs onto family budgets as they struggle to find ways to balance the health and long-term care needs of aging parents against other demands.
After reviewing the Senate repeal bill, the National Association of Medicaid Directors concluded, “No amount of administrative or regulatory flexibility can compensate for the federal spending reductions that would occur as a result of this bill.” So as scary as the CBO score is, remember this: the worst would be yet to come.