What the BCRA could mean for seniors
Medicaid, the nation's public health insurance program for low-income people, currently pays for roughly 40% of our nation's long-term care expenses. It's estimated that, under our current Medicaid funding system, nearly 50% of all such care would be paid by Medicaid by the year 2026.
After failing to gain support for the initial draft of the Better Care Reconciliation Act (BCRA) prior to the Senate's July 4th recess, GOP Republicans unveiled a revised plan on Thursday. The independent Congressional Budget Office estimated that 22 million people would lose healthcare coverage had the initial draft of the act been enacted. The revised BCRA maintains the significant Medicaid cuts that were a problem issue in the original plan.
Because of the BCRA's anticipated impact on future Medicaid funding, many of the millions of people losing coverage will be seniors.
There are two major ways that the BCRA impacts Medicaid coverage for our seniors. In the last decade, many seniors gained coverage through the Medicaid expansion that took place under Obamacare. The BCRA phases out that expansion, meaning that many who are now covered, would no longer be covered.
Secondly, the BCRA alters how the federal government funds Medicaid moving forward. Currently, the federal government matches state spending on Medicaid, offering about $1 to $2.79 for every dollar a state spends. The BCRA changes this course by containing a “per capita cap” for Medicaid. Under the BCRA, each state would be provided a set amount of money per person. That amount would grow from year to year according to the medical component of the Consumer Price Index to account for inflation. In 2025, however, the funding would be set by overall CPI.
The impact on our seniors is that the medical component of the CPI is growing more slowly than Medicaid costs are expected to grow. The overall CPI is growing much more slowly. It is not closely tied to medical costs and does not reflect either population growth or the impact of aging. Therefore, switching to the per capita cap will cut expected federal funding to Medicaid by hundreds of billions of dollars in the next ten years.
While states are required to keep certain people (i.e. those covered by Supplemental Security Income) on their Medicaid rolls, other seniors with optional coverage will likely be dropped. This could lead to a loss of access for many individuals receiving either home-based care and services or skilled nursing care in a long-term care setting.
The reduction in the number of seniors who qualify for Medicaid will also impact long-term care facilities. Without guaranteed sources of funding, many programs and services are likely to be impacted, leading to cut backs across the board. The facilities must, therefore, make every effort to maximize revenue and minimize cost. Management of the workforce and precision in the reimbursement process will be essential.
The BCRA still faces resistance from some Republican Senators as well as all of the Senate Democrats. A new CBO score is expected by Tuesday, July 18. No vote has been scheduled, but Senate Majority Leader Mitch McConnell has delayed the start of the Senate's August recess with hopes to get this newest iteration of “Repeal and Replace” passed.
Jonathan McCrary is the attorney and co-chairman of the Long Term Care Practice Group at Sandberg Phoenix von Gontard P.C. in St. Louis.