Why the Medicaid Cap is the Most Horrid Part of the Better Care Reconciliation Act (BCRA)
Medicaid caps will permanently crapify the program, and hence are far worse than one-time cuts in the rolls, bad as those are.
“The Downstream Consequences Of Per Capita Spending Caps In Medicaid“:
Recent federal reform proposals from House and Senate republicans would change the current financing system in which the federal government guarantees a share of total program spending to states to one limiting federal cost exposure by setting a per capita cap on federal payments to a state.
A change in the Medicaid program to a per capita cap financing system is included in the House-passed American Health Care Act (AHCA) and in the Senate-proposed Better Care Reconciliation Act of 2017 currently under consideration. With the Congressional Budget Office estimating that the Medicaid proposals in the AHCA will cut federal Medicaid spending by 25 percent by 2026, much attention has been given to the effects of such cuts on decreasing the number of individuals enrolled in Medicaid and increasing state budgets. Much less attention, however, has been given to a related but critical question: How do the reforms affect who enrolls in and gets care under Medicaid? From the lens of economics, we draw an analogy to per capita payments in health insurance markets and explain how the currently proposed reforms threaten the core programmatic purpose of Medicaid by incentivizing states to limit care and coverage to the states’ most vulnerable residents.
And:
Federal funding for Medicaid creates a national safety-net[3] health insurance program. Without federal funding, one might expect a classic “race to the bottom” among states to reduce state spending (and the accompanying taxes) by weakening their Medicaid programs. Federal policy for Medicaid prevents the race to the bottom by conditioning funding on both state spending and on the fulfilment of certain safety-net requirements, such as eligibility for statutory categories of individuals and benefit and access requirements.
(You say “race to the bottom” like that’s a bad thing!) Here’s how the caps would work:
It is not hard to envision Medicaid, under a per capita spending cap system, working as poorly as the early version of Medicare Advantage. While states are not for-profit insurers, as they grow to understand that it is financially difficult (or even impossible) for them to enroll a disproportionate number of sick individuals in Medicaid, they will likely shift enrollment efforts to less “risky” groups, such as the healthy and the young. States may be less eager to enroll or reenroll sick Medicaid recipients. Such incentives could, for example, manifest in the form of fewer enrollers at and less streamlined enrollment procedures for safety-net hospitals. At the same time, states may be much more likely to send enrollers to schools or community health centers where they can find young relatively healthy children and families. Alternatively, states could take a page out of the Medicare Advantage playbook and modify the services they offer to make them more attractive to young families and less attractive to older, sicker individuals.
Won’t that be great?
Dealing with Medicaid is going to be like dealing with a private health insurance company, because under the BCRA, the incentives are so similar!
(And because conservatives, like Tories,
play the long game, a crapified Medicaid will be ripe for ultimate abolition.)
And yes, this will happen:
A key question is whether or not such economic incentives are strong enough for states to act upon. The case seems clear that they are. While per capita cap proposals do specify different payments for each eligibility group, there is enormous variation in spending across and within eligibility groups in a given state that creates obvious “winners” and “losers” from the state’s point of view
In contrast, under a block grant or per capita cap model, federal Medicaid spending would rise at a specified growth rate, irrespective of the actual rise in Medicaid spending in a state.
Translating, caps would make it impossible to fund health care for an epidemic under Medicaid. Jackpot! More:
Limits on federal spending could put pressure on states to limit Medicaid spending over time, if Medicaid spending increased faster than the growth in federal contributions.
http://www.nakedcapitalism.com/2017/06/medicaid-cap-horrid-part-better-care-reconciliation-act-bcra.html?utm_source=feedburner&utm_medium=feed&ut m_campaign=Feed%3A+NakedCapitalism+%28naked+capita lism%29
As with Price crapifying ACA without input from Congress so ACA fails, Repugs plan to use Trashcare to up Medicare and Medicaid so Repugs can "LBJ 1960s don't work, we're killing it"
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