Rural Health Policy Project

Senate Bill Would Result in Coverage Loss for Six Million Newly Medicaid Insured Adults and Children’s Uninsured Rate will Increase Sharply, Reversing Historic and Bipartisan Gains

The United States Senate just passed a bill that would effectively repeal multiple provisions of the Affordable Care Act and result in at least 22 million Americans becoming uninsured. The Congressional Budget Office warned in its analysis of the legislation that major health insurance market disruption would be very likely, noting that:

“[R]epealing the subsidies and mandates established by the ACA while leaving in place the insurance market reforms would result in a less healthy population in the nongroup market and correspondingly higher average premiums. In addition, the market for nongroup insurance, particularly in smaller states, could become unstable, leading to very low to no participation by insurers and consumers.”

But market disruption isn’t the only problem. One of the major provisions in the bill would eliminate the Affordable Care Act’s Medicaid expansion to low-income adults. The elimination of Medicaid coverage would take place over two years. I’ll put aside the irony of Senators developing over the Thanksgiving holiday a plan to eliminate their neighbor’s health care coverage (although not their own) and examine the direct impact of this bill on low-income people.

To start, adults aren’t the only ones losing coverage. In a less expected twist, the bill undermines several key provisions that have resulted in the number of uninsured children being reduced to historic lows as our recent report highlighted. So millions of the 22 million will likely be children. My colleague Joan Alker will be blogging on this issue shortly.

With 31 states, including the District of Columbia, having now implemented expansion, the elimination of Medicaid for adults in the former coverage gap in these states would have a profound affect on low-income Americans. The majority of these adults are in a family with someone working at jobs such as restaurant work, construction or in service industries. While there is much talk of “repeal and replace” among politicians, this bill only covers the “repeal” portion of the sound bite. And, as my mother used to say, “If you’re going to throw that sandwich away because you don’t like it, don’t be too sure I’m going to make you a new one.”

To put the repeal sound bite in context, the latest official federal enrollment numbers show almost six million people (5,952,723) are newly Medicaid eligible adults enrolled in states that have closed their coverage gaps with funding from the Affordable Care Act. For what the loss of coverage means in human terms take a look at the latest from Kentucky where the incoming Governor has raised questions about continuing the state’s Medicaid expansion.

While President Obama has already issued a veto threat, it pays to step back a minute and consider the toll of this wholesale repeal if it ever is eventually enacted. Our research has found that in state after state almost 30% of the group of adults who would lose Medicaid coverage are families with children under 18 in the home. We also know from our latest report on children’s coverage gains under the ACA that Medicaid expansion for parents is a significant factor in the amazing reduction of our national rate of uninsured children to a historic low of 6%. These important gains for families would immediately be at risk should this repeal bill become law.

And don’t forget that rural hospitals in states that haven’t expanded Medicaid are more at risk of closure – this would put all rural hospitals back in that same boat with more financial pressure coming immediately to bear.

This rush to repeal Medicaid expansion is puzzling since states are using the remarkable flexibility available under the Affordable Care Act to design their own unique programs to use the federal Medicaid expansion dollars. Seven states have applied for these Medicaid waivers to use the federal Affordable Care Act money in different ways, and all seven of these states have been approved by the federal government to offer unique plans. Repeal of the Medicaid expansion would stop every one of these state efforts in their tracks.

Political maneuvering on a bill “everyone knows” the President will veto makes for headlines, sound bites and feel-good speeches. However our children and lowest income families shouldn’t be reduced to pawns in this debate.

Adam Searing is an Associate Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

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