We Forgot to Mention the AHCA’s Potential Effect on Medicaid

It’s not good.

Photo credit: geralt, CC0 Public Domain

Last Friday, Megan and I had a chat about the AHCA and what it might or might not include:

A Friday Chat About The State of the World

States can choose what pre-existing conditions to allow. In the past, some states have chosen pre-existing conditions related to sexual assault. Currently, we don’t know if they will. They could! But we don’t know that yet.

We didn’t, however, discuss the AHCA’s potential effect on Medicaid—which, as Vox notes, is “mostly getting ignored.”

So let’s un-ignore it:

The most important part of the Republican health bill is mostly getting ignored

Medicaid, a government program that simply compensates health care providers at stingy rates, is much cheaper than private insurance. So the ACA’s authors chose to expand it to cover all families with incomes below 138 percent of the poverty line, rather than shelling out the money it would have cost to have the government pay for them to buy private insurance.

The AHCA reverses this expansion. But to avoid the criticism that the law throws poor children off their health insurance, it reverses it in a somewhat sneaky way. Rather than taking Medicaid away from families who have it, it simply caps new enrollments in Medicaid so no new poor families can sign up. But the way this cap works, you can’t get back on Medicaid if you go off of it. So a poor family that gets a raise and becomes non-poor for a year will lose access to Medicaid permanently.

And poor families become non-poor, then poor again, frequently.

This sounds bad enough, but it’s only one of the potential Medicaid cuts in the AHCA. There’s also a “per capita cap,” which Vox explains more thoroughly but which is essentially a capped amount of money that the federal government can give states to use on Medicaid. Since Medicaid benefits come from both state and federal government budgets, this means that there will be less money available to states to fund Medicaid programs.

But it gets even more complicated than that, because Medicaid benefits go to a variety of people with a variety of health concerns and costs—people on low incomes, people with disabilities, senior citizens, etc.—and per capita caps might incentivize states to cut some groups of people out of Medicaid benefits.

At this point I’m just going to suggest that you read the entire Vox explainer, and we can discuss further in the comments.

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