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Affordable Care Act (ACA) Repeal & Medicaid Reform - Quick Versus Correct

Posted by Malissa Church | Sep 25, 2017 | 0 Comments

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Last week, another attempt to amend the Affordable Care Act (ACA) was submitted in Senate with a dose of "Medicaid reform" on the side. While I appreciate the effort, a Ralph Waldo Emerson quote comes to mind "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines." This rush to implement something - anything - while the Senate has the advantage of the 50 person voting majority rule has led to a hastily conceived bill promoting a short-sighted abdication of responsibility to the states.

Throughout the ACA "repeal, repeal and replace, or repeal and punt a replacement" discussion in 2017, I continue to be shocked by the lack of insight into impacts of the Medicaid reforms which are casually tossed into each proposal. All of the proposals submitted this year had potentially devastating impacts for seniors on Medicaid.

The pending Graham-Cassidy bill proposes temporary Medicaid block grants to states with a per capita cap in funding and a complete drop-off in federal Medicaid after 2026. The harsh reality is poorer states who often rely more heavily on federal funds, will suffer the most. The "per capita" feature will place a maximum number of enrollees based upon the current numbers with a calculated increase each year. There is no indication whether the calculations will keep pace with the demographic shifts coming in the next 50 years. This will force all states to decide how to apportion the limited funds to meet needs, which every indicator predicts will exceed demand. The choices are stark - raise taxes or decrease coverage.

While some applaud these measures as forcing able-bodied people to work, remember Medicaid is also the primary means most elderly Americans pay for home health or nursing care. The 2026 drop comes  when the need for these services will be dramatically increasing, setting the stage for a crisis. For more information, see this piece on the ten most important facts about Medicaid.

The non-partisan Kaiser Family Foundation published a thoughtful article on the five ways the new ACA proposal risks Medicaid coverage and a piece on 10 things to know about Medicaid  - they are both enlightening.

Here are some key factors to consider while this debate continues:

  • The decreased funding will likely force states to create quotas for care or increase taxes.

  • Senior citizens aged 85+ have annual healthcare spending 5 times greater than the $7,097 national average.

  • All block grant funding would cease in 2026 and each state's per capita figure would be set using 2017 data with calculated increases each year. Census data projects the population of 65+ Americans will increase from 50 million in 2016 to reach 63 million in 2023. By 2030, the number will be 71 million. How do we know the calculations will keep pace with the needs?

About the Author

Malissa Church

Call me today to discuss affordable, comprehensive estate planning or issues you might face related to age-related dementia.

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