The revised Senate version of the health care bill H.R. 1628, the Better Care Reconciliation Act of 2017, released on July 13 would still likely decrease health care access for the approximately 155,000 homeless adults enrolled in Medicaid since the Affordable Care Act’s (ACA) expansion and for many of the 201,000 homeless adults and 70,000 homeless children enrolled in Medicaid in 2013 prior to the ACA expansion and provide decreased access to health care than is expected for many of the 312,000 homeless adults who are currently uninsured, but who likely reside in states that are expected to eventually expand Medicaid coverage as the Center on Homelessness, Health, and Employment Law and Policy’s previous blog post estimated.
Almost all homeless people (more than 90%) have income less than 100% of the Federal Poverty Level (FPL) or have unknown income. Therefore, almost all homeless people are therefore eligible for Medicaid if they are elderly, disabled, or meet other eligibility criteria or are eligible for the Medicaid expansion, but not eligible for premium tax credits for health insurance plans in the individual or small group market under current law. As a result, the revised Senate health care bill changes that retain its reduction in funding for and enrollment in Medicaid and retain its expanded eligibility for premium tax credits but reduced cost-sharing for individual and small group health insurance plans are likely to reduce health care for many, if not most, homeless people than would otherwise be expected under current law.
The revised Senate health care bill would make some changes in Medicaid, but they would not likely affect the expected large reductions in the number of persons covered by Medicaid caused by the fundamental reductions in the program’s funding that the U.S. Congressional Budget Office (CBO) estimated would occur, including the likely loss of Medicaid coverage for more than 155,000 homeless persons.
First, the revised Senate health care bill would provide Medicaid coverage for recently-incurred expenses for only some applicants. While the original Senate health care bill reduced medical assistance under Medicaid coverage for new enrollees for expenses incurred from up to 3 months before the month of application to only in the month of application, section 127 of the revised bill retains medical assistance under Medicaid coverage for new enrollees for expenses incurred up to 3 months before the month of application for elderly persons or persons with disabilities, but retains the shorter coverage of expenses only in the month of application for other Medicaid applicants. Therefore, homeless persons who are not elderly or not disabled and who apply for Medicaid would not be able to receive coverage for expenses incurred before the month they apply for coverage and would likely greatly affect people who happen to incur expenses near the end of a month and are unable to apply for coverage until the following month.
Second, the revised Senate health care bill would provide only some funding for treatment for mental health and substance use. While the original Senate health care bill provided an additional $2 billion for grants to states to support substance use disorder treatment and recover support services for individuals with mental or substance use disorders, such as opioid addiction, section 202 of the revised bill would provide $45 billion ($4.972 billion for each of fiscal years (FY) 2018 through 2026) for this purpose.
The $45 billion proposed for substance use disorder treatment in the revised bill is less than the amount of Medicaid spending expected due to ACA coverage. The Substance Abuse and Mental Health Services Administration (SAMHSA) estimated $7 billion per year would be spent on treatment for mental health and substance use disorders from FY2016 through FY2020 due to ACA coverage.
The $45 billion proposed for substance use disorder treatment in the revised bill is less than the total amount of Medicaid spending expected. SAMHSA estimates that total Medicaid spending for mental health will cost $64 billion in 2018, $68 billion in 2019, and $72 billion in 2020 and that total Medicaid spending for substance use disorders will cost $10 billion in 2018, $11 billion in 2019, and $12 billion in 2020. The $4.9 billion per year in proposed funding is far less than the $84 billion in estimated Medicaid spending for treatment for mental health and substance use disorders in 2020 that would likely be reduced or eliminated starting in 2020 when the Medicaid per capita caps are instituted.
Finally, the $45 billion proposed for substance use disorder treatment in the revised bill is less than the total amount of Medicaid spending on medical assistance for any type of service expected for ACA expansion enrollees. Medicaid spending totaled $526 billion with expenditures for ACA expansion newly eligible enrollees comprising $56 billion in FY2015. This $4.9 billion per year in proposed funding is far less than the $56 billion per year in coverage for ACA expansion newly eligible enrollees that would likely lose coverage starting in 2020 when their eligibility is changed from mandatory to optional and the Medicaid per capita caps are instituted or in 2021 when the federal medical assistance percentage (FMAP) for ACA expansion enrollees is reduced.
Therefore, homeless persons with a mental or substance use disorder may be able to receive services with the $4.9 billion per year in proposed funding, but this “additional” funding would likely not outweigh the reduction in Medicaid coverage for enrollees who gained coverage pursuant to the ACA expansion and other Medicaid enrollees and so large numbers of homeless persons are likely to lose Medicaid coverage for treatment for mental health and substance use disorders and for other health care expenses.
Third, the revised Senate health care bill allows less limits on funding for declared public health emergencies. While the original Senate health care bill changed the structure of the Medicaid program from an entitlement to a program with a per capita cap or a block grant, section 132 of the revised bill allows the Secretary of the U.S. Department of Health and Human Services to not count state medical assistance expenditures in a participating part of a state to be counted toward the per capita caps or block grant limit if a public health emergency is declared for the declared period of the emergency from January 1, 2020 to December 31, 2024 up to $5 billion. As this proposed revision is not required, only applicable for a short-time period, not entirely prospective, and limited in amount, the estimated reductions in the number of persons covered by Medicaid due to the Senate health care bill is not likely to change. Therefore, although some homeless persons may live in areas where there is a public health emergency declaration, this provision is not likely to change the reduction in the number of homeless persons covered by Medicaid.
Overall, the revised Senate health care bill would still likely reduce enrollment in Medicaid for homeless non-elderly, non-disabled adults, decrease enrollment in Medicaid for homeless non-elderly, non-disabled adults in states that had not yet expanded Medicaid (“non-expansion states”), and decrease enrollment in Medicaid for homeless elderly or disabled adults and children enrolled in Medicaid not pursuant to the Children’s Health Insurance Program because the revised bill would still reduce federal funding for Medicaid through change of the Medicaid Program from an entitlement to a program with a per capita cap beginning in FY2020, would still reduce the FMAP that the federal government covered for Medicaid coverage beginning in 2021, would still make coverage of non-elderly, non-disabled adults with income less than 133% of the FPL who obtained coverage through the ACA optional instead of mandatory, would still allow states to increase cost-sharing requirements from basically nominal amounts to 5% of family income beginning in FY2020, would still allow states to increase eligibility redeterminations to every 6 months or even every month, and would still allow states to implement work requirements for adults who are not elderly, disabled, pregnant, the only parent or caretaker of a child who has not attained 6 years of age or a child with disabilities, or age 19 and maintaining satisfactory attendance in secondary school or participating in employment-related education beginning in FY2018.
Individual and Small Group Market Health Insurance Provisions
The revised Senate health care bill would make some changes with regard to the individual and small group market health insurance plans, but they would not likely affect the large reductions in the number of persons covered by individual and small group market health insurance plans than would otherwise occur, despite the proposed expansion of eligibility of premium tax credits to persons with income less than the FPL, because of the large increases in premiums, changes in premium tax credits, elimination of cost-sharing subsidies for deductibles, copayments, and other out-of-pocket costs, including the lack of individual and small group market health insurance for more than 300,000 homeless persons who are likely currently without health insurance.
First, the revised Senate health care bill allows all persons eligible to enroll in the individual and small group market to enroll in a catastrophic plan and premium tax credits for catastrophic plans. While the original Senate health care bill is expected to increase premium costs by increasing the permitting variation in premium rates based on age from 3 to 1 to 5 to 1, but altered the premium tax credit levels that allow for premium tax credits for persons with income from 0% to 100% of the FPL and set the percent of premium levels that they would pay at 2% of household income that would likely make premiums fairly affordable for low-income persons, sections 102 and 208 of the revised bill allows all individuals — not just people under the age of 30 and people without affordable coverage or who did not have health insurance and are not required to pay a tax penalty under the ACA because of hardship — to purchase a “catastrophic plan” for plans starting on or after January 1, 2019 and allows for premium tax credits for “catastrophic plans” starting after December 31, 2019 that do not provide platinum, gold, silver, or bronze level of coverage, only cover three primary care visits, and provide no coverage for essential health benefits until cost-sharing expenses are incurred. See 42 U.S.C. § 18022(e).
Moreover, the allowance of premium tax credits for catastrophic plans may lead to an increase in the number of catastrophic plans in the individual and small group market and the concomitant decrease in the overall medical care received by persons who are enrolled in a health insurance plan with the premium tax credits because the premium tax credits are provided for the median cost benchmark plan, which is defined to have a premium that is the median of all qualified health plans offered in the individual market in an area applicable to taxable years beginning after December 31, 2019 and additional catastrophic plans will lower the median level.
Without income to pay for the cost-sharing expenses, homeless people who enroll in a catastrophic plan would likely not receive many health services from catastrophic plans or would incur high medical expenses that they are unable to pay and homeless people who enroll in the median cost benchmark plan to receive the premium tax credit also are likely not to receive as many health services.
Second, the revised Senate health care bill increases funding for the state stability and innovation program. While the original Senate health care bill appropriates $50 billion for 2018 through 2021 for short-term assistance coverage and access disruption and respond to urgent health care needs within states and $62 billion for the long-term state stability and innovation program, section 106 of the revised bill appropriates an additional $70 billion for the long-term stabilization funding for 2022 through 2026 bringing the total for the long-term stabilization funding to $132 billion for 2019 through 2026, yet this $70 billion is proposed in the revised Senate health care bill to be used in a different manner.
Funding for the long-term stability and innovation program must be spent on one of four purposes: (1) to establish or maintain a program to provide financial assistance to help high-risk individuals, including by reducing premium costs for such individuals, who are estimated to have a high rate of use of health services, as measured by cost, and who do not have access to health insurance coverage offered through an employer, enroll in health insurance coverage under a plan offered in the individual market, (2) to establish or maintain a program to enter into arrangements with health insurance issuers to help stabilize premiums and promote state health insurance market participation and choice in plans offered in the individual market, (3) to provide payments for health care providers for the provision of health care services, or (4) to provide assistance to reduce out-of-pocket costs, such as copayments, coinsurance, and deductibles, of individuals enrolled in plans offered in the individual market.
Both the original and the revised bill require $5 billion for each year in 2019, 2020, and 2021 of the $36 billion in long-term stabilization funding for those years to be expended on the second purpose mentioned above of premium stabilization and promoting state health insurance market participation and choice in plans offered in the individual market. The CBO estimated with regard to the original Senate health care bill that three-quarters of the total funding for the long-term state stability and innovation program would be used for this purpose and would increase health care coverage — primarily for people not eligible for premium tax credits.
The CBO also estimated that the original Senate health care bill’s elimination of cost-sharing subsidies for plan years starting in 2020 would produce outlay savings of $98 billion total for 2020 through 2026 with an annual savings of $13 billion to $15 billion in each of those years. Thus, the remaining one-quarter of total funding ($15.5 billion) for the long-term state stability and innovation program that is estimated to be used for the other three purposes — including to reduce cost-sharing payments — would fall far short of the total needed to reduce cost-sharing payments to the levels provided under the ACA, which the CBO estimated in an example would provide cost-sharing subsidies ranging from $1,100 to $3,350 for persons with incomes between 100% and 250% of the FPL.
The long-term stabilization and innovation program is likely to lower premiums – which will not likely greatly affect homeless individuals who are likely to receive premium tax credits to cover almost all of the cost of their premiums under the original and revised Senate health care bill — and may lower cost-sharing requirements some or may lower cost-sharing requirements completely for some, but not all, persons enrolled in plans offered in the individual market, including those with incomes less than the FPL — which may or may not help homeless persons afford to actually uses individual and small group market health insurance plans.
In addition, section 301 of the revised Senate health care bill transfers $70 billion from the state stability and innovation program short-term assistance and the long-term stabilization and innovation program for 2020 through 2026 (leaving $74 billion for the stability and innovation program — the same amount as the original Senate health care bill) to establish a federal fund to make payments to health insurance issuers in a rating area in a state that offers plans for which premium tax credits are not available (but for which health savings accounts may be used to pay premiums) and offers at least one gold level, one silver level, and one median cost benchmark plan for which premium tax credits are available, to assist health insurance issuers in covering high risk individuals enrolled in the qualified health plans for which the premium tax credits are not available.
The transfer of $70 billion to assist health insurance issuers is likely to help health insurance issuers provide more health plans for high risk individuals such as those with pre-existing conditions, including at least one median cost benchmark plan for which the premium tax credits are available in each rating area in a state. Therefore, homeless persons in areas where there might not otherwise be a median cost benchmark plan available will likely be able to have health insurance coverage, but may still be unable to afford cost-sharing without the state stability and innovation program.
Overall, the revised Senate health are bill may increase enrollment in individual and small group market health insurance plans, but decrease the types of health services provided and actual use of health insurance plans, for homeless persons because the revised bill would allow persons with income less than 100% of the FPL to receive premium tax credits that would cover almost all of the cost of their premiums, would lower the median costs benchmark plan by allowing premium tax credits for catastrophic plans, would likely expand the number of rating areas with a median cost benchmark plan for which premium tax credits are available, would eliminate cost-sharing subsidies available pursuant to the ACA for persons with incomes between 100% and 250% of the FPL, and would provide limited funding, inter alia, to reduce cost-sharing requirements for any individuals enrolled in plans offered in the individual market, including those with incomes less than 100% of the FPL.
In conclusion, the revised Senate health care bill would likely reduce the number of homeless people with Medicaid by more than 155,000 homeless people and potentially increase the number of homeless people with individual and small group market health insurance plans that would likely cover fewer types of health services and require cost-sharing that greatly diminishes plan use except for emergencies by up to 450,000 homeless people (those who would lose Medicaid coverage and those that are uninsured).