Montana Budget and Policy Center: Daines misconstrues impact of GOP health plan
Jul 05, 2017
- July 2, 2017 (Reprinting of MBPC Blog)
On Wednesday night, Sen. Steve Daines held a tele-townhall to discuss the Senate GOP plan with Montanans. There are several instances where his statements don’t necessarily match up with the facts of the Senate GOP plan or its impact on Montana.
We know from the Congressional Budget Office – Congress’ own nonpartisan scorekeeper – that approximately 22 million more Americans will be uninsured if the Senate bill goes into effect.
An independent analysis provided for the Montana Health Care Foundation shows that Montana would lose over $5 billion in federal Medicaid funds, putting at risk coverage for thousands of low-income Montanans.
Here are some responses to statements made on Wednesday’s tele-townhall.
Eliminating Medicaid expansion will hurt many of those living in deep poverty, as well as, seniors in nursing homes and those living in their own home.
Sen. Daines has indicated a couple times that he wants to protect those who Medicaid was originally designed to serve and lists “the very poor”, “the elderly under 65”, and “the disabled.” However, in many cases, those with very low incomes, including low-income seniors, were not eligible under traditional Medicaid, and it was Medicaid expansion that provided access to affordable coverage.
Previous to Medicaid expansion, an individual was generally only eligible for coverage if they had incomes below 50 percent of the federal poverty line and had children under the age of 18, or had a qualifying disability. Medicaid left out many low-income families who couldn’t access coverage elsewhere.
During the debate on Medicaid expansion, we heard from many working parents with very low incomes who did not qualify for Medicaid but could not access affordable health insurance. We heard from many older Montanans who were living in deep poverty (and did not have young children) who did not qualify for Medicaid.
Medicaid expansion has provided the life saving coverage for nearly 80,000 Montanans, many of whom Sen. Daines has referenced in his examples. The Senate GOP plan will eliminate that coverage in 2021.
The Senate GOP plan will also gut traditional Medicaid, cutting over $5 billion in federal funds for Montana and likely forcing deep cuts to coverage and benefits.
Even if Sen. Daines accepts the devastation due to eliminating Medicaid expansion, the additional cuts to traditional Medicaid will also hurt the very populations he has said he wants to protect. Medicaid provides health care coverage for nearly one in every three children in Montana. It provides critical health services for people with disabilities to stay in their homes and live with dignity.
The Senate GOP plan will cap federal funds provided to states to run their Medicaid programs, leaving states on their own to cover increased costs for health services. Federal oversight of Medicaid dollars guarantees that the most vulnerable Americans – like low-income children, seniors, and people with disabilities – continue to get the care they need.
Under the Senate GOP proposal, spending on Medicaid would be capped or limited, and if a natural disaster occurred or public health crisis arose (like Zika or the current opioid crisis), the state would only be able to cover as many people as the annual lump sum would allow. Medicaid would no longer be a safety net program, with the federal government providing funding in response to state spending needs. Instead, states would have to come up with money themselves to cover any additional costs, turn people away, or make cuts to the people covered by the program.
Today, over 216,000 Montanans access health services through Medicaid coverage. If the Senate GOP plan becomes law, state policymakers would be left to their own devices to cut coverage for thousands of our most vulnerable neighbors.
The Senate GOP plan will leave thousands of Montanans, particularly those who are living on lower-incomes, sicker, and older, with no affordable option for coverage.
Sen. Daines alleges that the Senate plan provides a “place to land” for those with lower incomes who are currently covered under Medicaid expansion, but this is far from true. Under the Senate GOP plan, these individuals would be eligible for tax credits to purchase health insurance on the Marketplace, but families would face greater costs and likely be purchasing insurance that provides less coverage.
Furthermore, many others Montanans accessing health insurance through the ACA marketplace will face greater out-of-pocket costs for worse insurance. Premium increases would be especially large for:
- People in high-cost (read: rural) states. When looking at a comparison of how individuals in each state would fare, Montanans would, on average, see increased premiums that are the 10th highest in the country. This is because the across-the-board cuts to premium tax credits would disproportionately impact those in areas where health services and premiums are higher.
Many of those who weren’t buying insurance in 2014 are now eligible for affordable coverage through Medicaid, but the Senate GOP plan would take away that coverage.
- Older people with modest incomes. Older Americans are taking the brunt of the Senate GOP cuts, both through lower tax credits and through higher out-of-pocket costs for insurance. For example, a 60-year-old Montanan with income of $42,000 would see an increase in net premiums (after tax credits) of $5,492 to purchase the silver plan. Total reduction in tax credits is nearly $10,000.
Sen. Daines mentioned that approximately 35,000 Montanans paid the individual shared responsibility payment, and that roughly 14,000 of those are living on incomes below $25,000. It is important to note that this data is from 2014, before Montana expanded Medicaid. Prior to Medicaid expansion, those living under the poverty line (less than $12,000 for an individual, or less than $20,000 for a family of three) were stuck in the “Medicaid gap”, where they were not eligible for tax credits but also not eligible for traditional Medicaid.
Montana’s bipartisan Medicaid expansion changed all that. Without access to Medicaid, lower-income families would be forced to buy insurance on the marketplace with less assistance and would be accessing less comprehensive insurance with greater out-of-pocket expense. In short, many of these Montanans would be back to where they were in 2014: with no insurance.
Montana’s bipartisan Medicaid expansion plan has saved the state millions of dollars and has provided a major lifeline for many of Montana’s rural hospitals.
Sen. Daines mentioned that the state is seeing greater enrollment in Medicaid expansion than previously projected and therefore increased costs. Without a doubt, Medicaid expansion has been a success.
Under the ACA, the federal government provides federal funding at 90 percent of the cost of coverage – a higher federal match than traditional Medicaid and federal highway dollars. This new coverage has also meant major savings for the state and for many hospitals and clinics that face high uncompensated care costs. In its first year, Medicaid expansion has saved the state of Montana over $22 million. Montana will continue to see savings. What would make Medicaid expansion untenable is the current Senate efforts to cut the federal match, putting at risk coverage for thousands of Montanans.
The massive cuts to Medicaid coverage will not help the ongoing opioid epidemic in the state – actually, it could get a lot worse.
Since 2015, Medicaid has become our state’s primary payer for substance use disorder (SUD) treatment services and a critical tool in combatting alcoholism, methamphetamine use, opioid abuse and overdose, and the myriad social consequences of addiction. In fact, since the passage of Medicaid expansion, Montana has seen a 67 percent increase in federal dollars going toward SUD treatment. Eliminating Medicaid expansion and cutting Medicaid dollars will make it more difficult for Montanans to access the treatment they need and could further devastate our families and communities.
These are important facts for Sen. Daines and Montanans to know as the Senate continues to negotiate a potential bill that could rip health coverage away from tens of thousands of Montanans. Montanans made their voices heard this week during the tele-townhall, and we need to keep sharing our stories and concerns about what this bill would mean for Montana families.