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The Arc
Key Medicaid Points in Senate Bill

TO: State and Local Chapter Executives of The Arc
FROM: Marty Ford
RE: Senate version of health care reform/Medicaid cut legislation

On June 22, 2017, the Senate Budget Committee released a discussion draft of health care reform legislation, the “Better Care Reconciliation Act of 2017” (“Senate bill”).  Some Senators are claiming that provisions have been added to this bill to protect people with disabilities. However, provisions related to people with disabilities are wholly inadequate.

As Peter Berns noted in his statement ,“This bill will have a devastating impact on individuals with intellectual and developmental disabilities and their families. Make no mistake – people’s lives and independence are on the line.”  This fact was well understood by the many disability advocates who turned out to protest in the Senate when the bill was released, with many being arrested.  Click here to watch MSNBC’s coverage of the protest and an extensive analysis of Medicaid’s significance to people with disabilities.

MSNBC Coverage

Below are key points about the Senate’s discussion draft that you should be aware of and should convey to your board, staff, volunteers, members, and others in your networks.

Overall Key Points About the Medicaid Provisions

  • The Senate bill is far worse than current law.
  • The Senate bill’s Medicaid changes are even more devastating than the House bill’s.
  • The Senate bill maintains the damaging per capita cap structure proposed in the House bill. Any per capita cap scenario will inevitably lead to loss of Medicaid eligibility and services for children and adults with disabilities as states cut eligibility and services under dramatically reduced overall federal funding levels.
  • The Senate bill continues to use cuts and caps to Medicaid as the source of revenue to pay for repealing taxes on health insurance, prescription drugs, medical devices, and numerous other provisions that fund the current law.
  • The Senate bill ends the extra matching funds for the Medicaid expansion states by 2024. No additional states would be allowed to expand Medicaid to cover low income adults.

The Senate bill includes provisions that appear to acknowledge several concerns raised about the Medicaid cuts in the House bill – but these provisions fail to fix the problems: 

  1. Harm to children who are blind or have disabilities
    The Senate bill exempts from the formula for calculating federal funding to states under the per capita caps “children under 19 years of age who are eligible for medical assistance under this title on the basis of being blind or disabled.”  However, there is no specific language in the bill that provides protections against cuts for children with disabilities or that further defines who these children are.  If this language targets children who are eligible for Supplemental Security Income (SSI) (about 1.2 million children), it would leave out many children who have health needs or disabilities but do not meet SSI’s strict income and disability standards.

    In reality, most states will not be able to make up the difference from the deep cuts under per capita caps and will not be able to protect any group. States will be focused on keeping Medicaid spending under the cap, or face penalties. The Senate bill’s cuts to Medicaid are expected to be similar in magnitude to the House bill’s (which cut $830 billion over 10 years). To make up for this massive loss of federal funding, states will be forced to cut services, eligibility groups, reimbursement rates for providers, make across the board cuts, or take other actions to cut costs.

    The net effect is that children with disabilities will not be protected.

  2. New penalties punish states for investing in Medicaid services
    Under the House bill, states with low Medicaid spending would forever be locked into current spending levels. States would not have resources to invest in rebalancing their service systems for people with disabilities, improving wages for direct support workers, or any other state priority. The Senate bill does the opposite of addressing this concern. It creates provisions to drive down spending in many states. Every year the federal government would compare each state’s spending to the average national spending. If your state is significantly below average spending in the different categories (kids, adults, people with disabilities older people) the state might get a bump in funding but if a state is above average the state may receive a cut in funding. This financially punishes the states that have invested the most in providing services to people with disabilities, seniors, and children. For many people with disabilities, being able to access timely needed care is a life or death matter—this is a crude and unfair attempt to ease the negative impact of per capita caps on low-spending states simply by shifting the harm to states that have prioritized their Medicaid programs. The penalties for states that spend more money on care do not account for key demographic and economic factors that shape differences in state spending.

  3. Meaningless Medicaid Home and Community Based Services (HCBS) Waiver Language
    Medicaid cuts and per capita caps will harm people with disabilities who need home and community-based services (HCBS) because with dramatically reduced federal funding, "optional" and “waiver” HCBS will likely be cut first. States will be forced to provide mandatory services like nursing home care before HCBS.  The Senate bill directs the Secretary of Health and Human Services to implement procedures to encourage states to address the issue – a meaningless and wholly inadequate response to this critical concern.  

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