June 24, 2017

OBAMACARE PLUS:

The New Senate Republican Bill Will Transform American Health Care (Avik Roy, 6/24/17, Forbes)

The Senate bill includes and refines the best part of the House bill: its reforms of Medicaid, the dysfunctional government-run health care program for the poor whose enrollees have no better health outcomes than the uninsured.

Because the Senate bill's tax credits are robustly means-tested and available to those below the poverty line, the bill is able to repeal Obamacare's Medicaid expansion while offering higher-quality coverage to individuals who signed up for Medicaid under the expansion.

The reason that Medicaid's health outcomes are so poor is because the outdated 1965 Medicaid law places a laundry list of constraints on states' ability to manage their Medicaid programs. As a result, the main tool states have to keep Medicaid costs under control is to pay doctors and hospitals less and less each year for the same care. Hence, many doctors don't take Medicaid, and Medicaid enrollees struggle to gain access to care.

The Better Care Reconciliation Act of 2017 addresses these problems in several ways.

First, the bill repeals Obamacare's Medicaid expansion, and replaces it with tax credits so that low-income Americans can buy the coverage of their choice at an affordable price.

Second, the bill gives states a new set of tools to make their Medicaid programs. For example, under Obamacare, states are only allowed to check if someone is eligible for Medicaid once a year, even if that enrollee has moved to a different state, or becomes no longer eligible, or is no longer alive. Jonathan Ingram of the Foundation for Government Accountability, in a recent report, recommended allowing states to redetermine eligibility more frequently and thereby culling their rolls of ineligible individuals.

Third, the bill puts the legacy Medicaid program on a long-term per-capita cap tied to medical inflation through 2025, and conventional inflation (CPI-U) thereafter. This change is important, because Medicaid per-enrollee spending is growing at a slightly slower rate than Medical inflation; hence, making the program sustainable requires the use of CPI-U. The fiscal sustainability of Medicaid is essential to making sure that those who depend on the program can know it will be there for them in the future.

Posted by at June 24, 2017 6:37 PM

  

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