Affordable Care Act Update - 02/03/17


Independent Health is closely following efforts by President Donald Trump and the Republican-controlled Congress to repeal and replace the Affordable Care Act (ACA) and will keep our customers up-to-date on developments. We provide this latest overview in our occasional series of ACA updates.

February 3, 2017 Update:
Congressional Activity to Repeal the ACA


Recent Activity

On January 13, Congress passed a budget resolution which included directives to four committees to find $1 billion in savings associated with repealing provisions of the Affordable Care Act (ACA) through the budget reconciliation process.

The budget reconciliation is a fast-tracked approach to pass legislation with only a simple majority in the Senate, rather than the required 60 votes. While the budget resolution called for the committees to submit their reconciliation language by January 27, the committees did not meet that deadline, and are working to complete language by late February or early March.

Only those provisions that impact the budget, such as tax and spending provisions, can be included in reconciliation legislation, such as the individual mandate, Medicaid expansion, taxes, and subsidies. Reconciliation cannot include any provisions that do not impact the budget; for example, the ACA consumer protections and Essential Health Benefits.

This past week, Congress held hearings to consider proposals to include in reconciliation legislation alternatives. Transcripts and other documents from some of the hearings are available online:

As the President and Congress consider legislative and executive approaches, proposals to replace the ACA will have to address key components, such as:

  • Access and Affordability
  • Individual mandate (1/23/2017 Update)
  • Taxes and penalties
  • Medicaid expansion
  • Marketplace
  • Delivery system reform
  • Medicare
  • Drug costs

This update covers Medicaid expansion.

Medicaid Expansion
The Medicaid program is a voluntary health insurance program jointly funded by the Federal and state governments for low-income and disabled people, providing health care for more than 72 million people nationally. The government sets requirements regarding base benefits; however, states have the flexibility with respect to eligibility and optional benefits, so there is variation of coverage and benefits from state to state.

The ACA changed Medicaid in a few key ways:

  • Expanded eligibility to non-elderly adults with incomes up to 138% of the federal poverty level ($16,243 for an individual and $33,465 for a family of four in 2016).
  • The ACA required all states to participate in Medicaid expansion or lose federal funding. However, a Supreme Court decision struck down the requirement, thus making Medicaid expansion optional.
  • Enhanced federal funding for the adult expansion population. To make Medicaid expansion affordable to states, the ACA provides 100% federal funding for newly eligible populations from 2014 through 2016 and is set to phase down to 90% by 2020. To date, 32 states (including New York) have adopted Medicaid expansion, whereas 19 states have not.

Congress is looking to reevaluate how to fund Medicaid. Currently, Medicaid is funded by a federal match, which varies by a state’s per-capita income. For New York, the federal match is $0.50 for every $1 the state pays toward the care of a Medicaid beneficiary.

One approach Congress is considering to replace the federal matching program would provide funding through block grants. This approach would give each state a set amount of money each fiscal year, giving states the accountability to determine how that money is spent. A block grant financing structure could put more pressure on state budgets which may lead to fewer people with Medicaid coverage or reduced Medicaid benefits.

As Congress and the Trump Administration plan for the future of the ACA, Independent Health continues to offer plans and benefits through our portfolio of State Products, including MediSource managed care plan available to income eligible adults, children and the disabled. We also work collaboratively with community partners to address the needs of our less fortunate neighbors to advance our region toward better health, better care and lower costs.