American Health Care Act

VNAA’s Concerns with AHCA

VNAA seeks to ensure continued accessibility and affordability of home based care. VNAA is seriously concerned that the AHCA takes a step backwards for vulnerable and home-based care patients. VNAA opposes passage of the AHCA. 

Several provisions of this legislation impact seniors, older Americans, and people with disabilities and their healthcare providers. These provisions include:

  • Significant reductions to Medicaid funding overall. The non-partisan Congressional Budget Office (CBO) estimates that this bill will cut federal funding to Medicaid by $880 billion over the next decade, shifting costs to states and putting a dramatic burden on state budgets.
     
  • Caps on Medicaid funding for services and provider reimbursements. The bill fundamentally changes how the federal government pays for Medicaid by converting it to a capped funding structure (a “per capita cap”). This structure effectively caps the services that beneficiaries can access and could lead to further downward pressure on provider rates. 
     
  • Higher costs for older Americans due to age-rating. AHCA allows insurance companies to charge people over age 50 five times as much as they charge younger people. Currently, insurers are limited to charging three times as much. Estimates by AARP have found that the age tax in the AHCA could increase insurance premiums for people ages 60-64 by more than $3,000 a year — to almost $18,000 annually. People between 50 and 59 would see a $1,500 increase in premiums to almost $13,000 a year.
     
  • Repealed funding for certain Home and Community-Base Care programs. The bill eliminates funding for personal care assistants through Medicaid, which would significantly reduce access for seniors and people with disabilities.

In total, AHCA will significantly impact individuals trying to access healthcare and home-based services, make health insurance and other services more expensive and reduce resources available to providers to serve vulnerable populations.   Under the proposal, every state would lose federal funding, forcing states to reduce services for populations covered by Medicaid as well as to slash provider reimbursement levels.

VNAA will continue to monitor and engage in this debate. Any House-approved legislation faces considerable challenges in the Senate, setting up negotiations to develop a compromise bill to pass both chambers

Take Action: Reach Out to Your Representative Today
  • Let your Representative know that the AHCA will harm your home-based care organization and your patients.
  • Click here for a contact list of your Representatives.
  • Please use quick and simple messaging as Congressional offices record only “for” or “against” and caller information.

Overview of the Legislation

American Health Care Act – Original Version:
  • The original AHCA, as it passed the House Budget Committee contained provisions that would:
  • Phase out the ACA Medicaid expansion;
  • Impose a per capita cap on Medicaid going forward;
  • Eliminate the ACA’s Prevention and Public Health Fund;
  • Defund Planned Parenthood;
  • Repeal the ACA’s cost sharing reduction payments;
  • Create a $100 billion Patient and State Stability Fund for states to use for reinsurance and other purposes;
  • Repeal the ACA’s individual and employer mandate penalties;
  • Create a penalty for individuals who try to enroll in coverage who have not had continuous coverage;
  • Repeal the ACA’s actuarial value metal level requirements;
  • Change the ACA’s age rating ratios from three-to-one to five-to-one;
  • Amend the ACA’s current premium tax credits to allow them to be used for off-marketplace plans and to change the tax credit formula to make it more favorable to younger enrollees;
  • Create new fixed-dollar, age adjusted tax credits for after 2020; and,
  • Relax some requirements pertaining to health savings accounts.

Changes from the Manager’s Amendment of AHCA:

Medicaid
  • Discontinue ACA’s mandatory expansion of Medicaid for childless, nondisabled, non-pregnant adults - the manager’s amendment would end the ACA’s mandatory expansion for childless, nondisabled, non-pregnant adults up to 133 percent of the poverty level and sunset the ability of states to decide to cover adults above 133 percent of poverty with an enhanced Medicaid match as of the end of 2017. States could cover the ACA expansion population, however, as an optional category with their normal Medicaid match after that date. Medicaid expansion enrollees enrolled prior to the end of 2019 would retain the enhanced match after 2019 (90 percent in 2020), but only so long as they remained continuously enrolled and only in states that had expanded Medicaid by March 1, 2017.
     
  • Allow a work requirement for childless, nondisabled, non-pregnant adults -  the manager’s amendment would allow states to impose a work requirement on nondisabled, nonelderly, non-pregnant adults as a condition of Medicaid coverage. The requirement is modeled after requirements and exemptions in the Temporary Aid to Needy Families (TANF) program. States could include as countable work activities subsidized private or public sector employment, on-the-job training, job search or readiness activities, community service programs, various educational programs, or providing childcare to an individual participating in a community service program. Getting Medicaid beneficiaries to work was a key demand of conservatives and thus an optional work requirement is in the amendments, along with a 5 percent administrative cost increase for states that impose work participation programs, recognizing the considerable bureaucracy necessary to run such programs.
     
  • Modify the matching formula for the Medicaid per capita cap program - the policy amendments make a few changes, mainly technical, in the AHCA’s Medicaid per capita cap program. One amendment modifies the matching formula for the state of New York in a manner intended to force the state to rely less on tax contributions from rural counties and more on state tax revenues to fund Medicaid. (The local tax relief specifically does not apply to New York City). 
     
  • Choose block grants instead of per capita caps - in perhaps the biggest change wrought by the manager’s amendments, states would be allowed to choose a block grant rather than a per capita cap to fund their traditional adult and children populations otherwise covered by the per capita cap. Block grants would not be available for the elderly and disabled. States choosing a block grant would be given considerable flexibility in determining which populations they would cover (although they would have to cover certain low-income women and children) and the services they would provide to them. A plan submitted by a state to administer a block grant program would be deemed approved unless HHS concludes within 30 days that the plan was incomplete or actuarially unsound. The amendment includes formulas for calculating block grant amounts and inflation updates. 
     
  • Appropriate to the Medicaid per capita cap and Patient and State Stability Fund programs - the manager’s amendment appropriates $1 billion to fund the administration of the Medicaid per capita cap and Patient and State Stability Fund programs and changes in the tax credit program.

Congressional Budget Office Impact Estimates

There is not a new Congressional Budget Office “score” for the amended version of the AHCA. The original can be found at here. Areas of focus on the impacts of the legislation are:
  • Changes to the overall savings to the bill: CBO estimated that the original bill would save the federal government $337 billion from 2017-2026. 
    • Under the manager’s amendment taxes created under the Affordable Care Act (ACA) will be repealed earlier than the original bill. 
    • There is the one percent point increase of the yearly growth rate (medical care component of the consumer price index for urban consumers (MCPI-U)) for the elderly and disabled populations’ per capita cap. These changes are likely to increase the overall costs of the bill, thus reducing overall savings. 
       
  • Changes to cuts in federal Medicaid funding
    • Adding one percent point to the MCPI-U for the elderly and disabled populations will result in an increase overall federal Medicaid funding under the per capita cap. Originally the bill was estimated to reduce federal Medicaid funding by $880 billion over ten years. The original CBO score did not itemize how much of the decrease in federal Medicaid funding was due to loss of eligibility vs. the change to the per capita cap. It is possible that MCPI-U +1% CBO could determine that the reduction in federal Medicaid funding is close to budget neutral and there may not be major reductions in federal Medicaid funding due to the per capita cap. 
       
  • Changes to the number of uninsured: It is unclear how the manager’s amendment will improve the initial projection that 24 million people will lose insurance by 2026 under the AHCA.

Resources
Kaiser Family Foundation AHCA and ACA Crosswalk:  http://kff.org/interactive/proposals-to-replace-the-affordable-care-act/

Milliman Block grants and per capita caps for Medicaid:  http://us.milliman.com/insight/2017/Building-blocks-Block-grants--per-capita-caps--and-Medicaid-reform/ 

Manatt State Toolkit on Assessing Medicaid Caps:  http://www.statenetwork.org/resource/data-points-to-consider-when-assessing-proposals-to-cap-federal-medicaid-funding-a-toolkit-for-states/ 

VNAA will continue to provide updates on the AHCA legislation. Please contact Joy Cameron if you have questions or concerns.