If you were listening this morning you heard us discuss the current healthcare bill that is being discussed in Washington. Here are just a few notes on the bill and what I think the chances are of it passing.
First a little civics class, the reason this is even being discussed is that we are currently in a Reconciliation Period. This is a set time frame that allows for bills to be passed with a simple majority versus the normal two thirds votes needed at other times. Reconciliation allows for bills to be presented that would impact the Federal Budget, period. It is not to be used for any law that would not have an impact on the budget. Because healthcare has an impact on the federal portion of Medicaid it can be considered during this period.
So this bill is being put forward by 4 Republican Senators, Graham from South Carolina, Cassidy from Louisiana, Heller from Nevada and Johnson from Wisconsin. All Republicans. The bill as it currently stands has some major changes in the funding of the federal portion of Medicaid. Currently Medicaid is funded by both the state and federal budgets, and percentages vary from state to state. It is currently what is called a “fee for service” meaning that as the services are used a fee is charged and there is no cap on the amount of services that can be provided. So if it is a busy flu season or a hurricane hits, Medicaid costs will go up and the State and Federal budgets would need to cover those costs.
The current bill proposes to change this to a “block grant” in other words, each state is given a block of money from the federal budget based on previous years use and that is the total funding from the federal portion. If the state was to use less money they would keep the difference, if they were to use more money the burden would be shifted to the state taxpayers. The other portion of this is that the amount from the federal government would decrease beginning in a few years. This would force the states to manage Medicaid better in their states. It would also potentially have them looking for ways to cut costs or services to make sure the state was not left with the increased costs.
For states that are economically challenged this is concerning as they are seeing their Medicaid numbers growing not shrinking, ( one of the points being raised is to keep it as a per capita amount to allow for the increase in Medicaid participants if the economy in the state changes) The bigger concern in states like Illinois is that we are not paying our bills now due to mismanagement and poor budgeting so why do we think a block grant would be a good idea.
The bill allows for states to eliminate ACA essential benefits which means states would be allowed to make cuts to care and services. It also eliminates the employer and individual mandate and as we have discussed in the past Insurance does not work if the math does not work. Eliminating the potentially healthy individuals to help offset some of the sicker population impacts the math and also impacts how we think about wellbeing versus caring for the ill.
Do we think it will pass? In its current form it will not as we already have 4 Republican Senators voting No, but this is not over yet. New versions of the bill will be presented in the next few days in the hopes of swaying some of the no votes. The next 2 days will be interesting with the possibility of a vote on the floor on Wednesday. I think it may go for a vote even if they don’t have the votes, this would be a political move to highlight Republicans that vote against it.
More to come I am sure.