The Senate version of the health care bill H.R. 1628, the Better Care Reconciliation Act of 2017, released last Thursday would likely decrease health care access for homeless people currently enrolled in regular Medicaid and provide decreased access to health care than is expected for some homeless people who are currently uninsured, but who reside in states that are expected to eventually expand Medicaid coverage.
According to data compiled by the Health Resources and Services Administration and our analysis, 356,000 homeless adults and 79,000 homeless children were enrolled in Medicaid in 2015 with approximately 201,000 homeless adults enrolled in Medicaid in 2013 prior to the Affordable Care Act’s (ACA) expansion and approximately 155,000 homeless adults enrolled in Medicaid since the ACA’s expansion. Conversely, 312,000 homeless adults and 22,000 homeless children were uninsured in 2015. Almost all of the homeless people (more than 90%) had income less than 100% of the Federal Poverty Level (FPL) or had unknown income and were therefore 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. The U.S. Congressional Budget Office (CBO) estimates that 80% of the uninsured people that would qualify under the ACA expansion for individuals with household income less than 133% of the FPL in states that have not yet expanded Medicaid would become enrolled in Medicaid.
Medicaid Health Insurance Provisions
The Senate health care bill would likely reduce overall 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 (CHIP) because the bill would reduce federal funding for Medicaid, would make coverage of non-elderly, non-disabled adults with income less than 133% of the FPL who obtained coverage through the ACA optional, may decrease some services provided by Medicaid, may increase cost-sharing requirements, may increase eligibility redeterminations, and may increase work requirements.
Many homeless individuals who are enrolled or become enrolled in Medicaid or would become enrolled in Medicaid based on the ACA’s expanded eligibility for individuals or families with household incomes less than 133% of the FPL may lose Medicaid coverage or the opportunity to enroll in Medicaid under the Senate health care bill because the federal government would cover less of the Medicaid coverage costs for these individuals or families (and slightly less of the costs of individuals previously eligible for Medicaid). The ACA increased the federal medical assistance percentage (FMAP) or portion of Medicaid coverage provided by the federal government for the ACA’s newly eligible individuals in 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII) to 100% in 2014, 2015, and 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and each year thereafter. 42 U.S.C. § 1396d(y). Section 126 of the Senate health care bill decreases the increased FMAP for newly eligible individuals already enrolled to 85% in 2021, 80% in 2022, and 75% in 2023, and does not provide any increased FMAP after 2023 and changes the FMAP to the enhanced FMAP of a 23% increase up to 100% until September 30, 2019 or 30% increase up to 85% in a state’s FMAP after September 30, 2019 in 42 U.S.C. § 1396d(b) for individuals with household incomes less than 133% of the FPL in expansion states before January 1, 2024. Section 126 of the Senate health care bill also decreases the transition percentage increase in the FMAP for individuals in 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII) who are non-pregnant, childless adults with incomes between 100% and 133% of the FPL who the state may require enrollment in a benchmark coverage to 80% in 2017 to 2023 from the previous transition percentages of 80% in 2017, 90% in 2018, and 100% in 2019 in 42 U.S.C. § 1396d(z). In addition, section 126 of the Senate health care bill also terminates at the end of 2023 the, previously not time-limited, 2.2% equitable support increase in the FMAP for medical assistance for individuals who are not newly eligible in 42 U.S.C. § 1396d(z). The CBO estimates that under current law, additional states would expand their Medicaid programs and that, by 2026, approximately 80% of newly eligible people will reside in states that have expanded and estimates that under the Senate health care bill because states would have to pay a greater share of the costs for enrollees, no additional states would expand eligibility and that states that have already expanded their Medicaid programs would no longer offer that coverage, gradually reducing the share of the newly eligible population residing in a state with expanded eligibility as the matching rate for that population declined — with that share reaching about 30% in 2026.
Many homeless individuals who are enrolled or become enrolled in Medicaid or would become enrolled in Medicaid may lose Medicaid coverage or the opportunity to enroll in Medicaid because of a per capita cap on total Medicaid assistance for each state beginning in fiscal year (FY) 2020. Current law does not cap assistance totals for eligible individuals for covered services. 42 U.S.C. § 1396b. Section 133 of the Senate health care bill would establish a per-person limit on payments for medical assistance that reduces payments to states by one-fourth of the state’s excess aggregate medical assistance payments for 1903A enrollees, including elderly enrollees, blind and disabled enrollees, child enrollees not enrolled on the basis of CHIP, expansion enrollees, and other non-elderly, non-disabled, and non-expansion adults, and only exempts from the per capita limit individuals enrolled in CHIP, individuals receiving medical assistance for Indian Health Services, breast and cervical cancer services eligible individuals, specified partial-benefit enrollees, and blind and disabled children. Section 133 of the Senate health care bill only increases the per capita cap for FY2020 to FY2025 by the percent increase in the medical care component of the consumer price index for all urban consumers (CPI-M) with an additional 1 percentage point for elderly enrollees, blind and disabled enrollees, and child enrollees for these fiscal years and only increases the per capita cap for fiscal years after 2024 by the percent increase in the consumer price index for all urban consumers (CPI-U) for all 1903A enrollees. In states participating in the Medicaid Flexibility Program, section 134 of the Senate health care bill provides that Medicaid funding will be increased only by the CPI-U. The CBO estimates that Medicaid spending for the 2017-2024 period, on a per-capita basis, would grow faster for non-disabled individuals under current law (4.9%) than under the CPI-M and would grow slower for elderly enrollees and disabled enrollees under current law (3.3%) than under the CPI-M plus 1 percentage point. The CBO estimates substantial differences between spending growth for Medicaid under current law and the growth rate of the per capita cap for all groups in 2025 and beyond as it estimates the growth of the CPI-U in those years to be only 2.4%. The CBO estimates that the Medicaid Flexibility Program would only be attractive to a few states that expect to decline in population as it would further constrain federal reimbursement so the CBO estimates this option to have little effect on enrollment in Medicaid. The CBO estimates that with less federal reimbursement for Medicaid, states will have to decide whether to commit more state resources or to reduce spending by restricting eligibility for enrollment through work requirements and other changes, cutting payments to health care providers and health plans, eliminating optional services, or providing more efficient methods for delivering services and that states would adopt a mix of these approaches. The CBO predicts that if states narrowed the categories of eligibility or used administrative procedures to make it more difficult to enroll, some enrollees would lose access to Medicaid coverage.
Although the ACA mandated that states allow non-elderly, non-disabled adults with income less than 133% of the FPL to enroll in Medicaid, 42 U.SC. § 1396a, the U.S. Supreme Court made this requirement optional for the states in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012). Section 126 of the Senate health care bill language making this group of individuals (non-elderly, non-disabled adults with income less than 133% of the FPL) an optional Medicaid coverage group after December 31, 2019.
This legislative change will not likely have much impact on enrollment in Medicaid, but could reduce the health care services that these individuals would be covered under by Medicaid. Pursuant to the ACA, states were required to provide specifically-enumerated “medical assistance” services to specified categories of Medicaid enrollees, including to newly eligible enrollees with incomes less than 133% of the FPL identified in 42 U.S.C. § 1396a(a)(10(A)(i)(VIII). 42 U.S.C. § 1396d. These defined “medical assistance” services include the following: (1) inpatient hospital services (other than services in an institution for mental diseases), (2) outpatient hospital services, (3) other laboratory and X-ray services, (4) nursing facility services (other than services in an institution for mental diseases), early and periodic screening, diagnostic, and treatment services, and family planning services, (5) physicians’ services and medical and surgical services furnished by a dentist, (6) medical care or remedial care, (7) home health care services, (8) private duty nursing services, (9) clinic services, (10) dental services, (11) physical therapy and related services, (12) prescribed drugs, dentures, and prosthetic devices and eyeglasses, (13) other diagnostic, screening, preventive, and rehabilitative services, (14) inpatient hospital services and nursing facility services for individuals 65 years of age or over in an institution for mental diseases, (15) services in an intermediate care facility for the mentally retarded, (16) inpatient psychiatric hospital services for individuals under age 21, (17) services furnished by a nurse-midwife, (18) hospice care, (19) case management services and tuberculosis-related services, (20) respiratory care services, (21) services furnished by a certified pediatric nurse practitioner or certified family nurse practitioner, (22) home and community care for functionally disabled elderly individuals, (23) community supported living arrangements, (24) personal care services, (25) primary care case management services, (26) services furnished under a program of all-inclusive care for elderly (PACE) program, (27) primary and secondary medical strategies and treatment and services for individuals who have Sickle Cell Disease, (28) freestanding birth center services, and (29) any other medical care, and any other type of remedial care recognized under state law, specified by the Secretary of the U.S. Department of Health and Human Services, except for payments for care or services for inmates in non-medical public institutions or for individuals who have not attained 65 years of age and who is a patient in an institution for mental diseases. Section 126 of the Senate health care bill moves the Medicaid eligibility for expansion enrollees with incomes less than 133% of the FPL to 42 U.S.C. § 1396a(a)(10)(A)(ii)(XXIII) beginning January 1, 2020 and this new subclause (XXIII) is not on the list of individuals who the state is required to provide the specifically-enumerated “medical assistance” services to in 42 U.S.C. § 1396d. Therefore, the states may only be required to provide the specifically-enumerated “medical assistance” services in (1) through (5), (17), (21), and (28) to non-elderly, non-disabled adult expansion enrollees with incomes less than 133% of the FPL. 42 U.S.C. § 1396a(a)(10)(A).
Homeless non-elderly adults are likely to receive more health care covered of inpatient psychiatric hospital services, especially adults who are eligible for Medicaid other than because their incomes are less than 133% of the FPL. Although current law requires states to cover under Medicaid inpatient psychiatric hospital services for individuals under the age of 21 and for individuals 65 years of age or older, it does not include in the definition of “medical assistance” coverage for inpatient hospital services or for nursing facility services in an institution for mental diseases and excluded from the definition of “medical assistance” payments for care or services for adults who are patients in an institution for mental diseases. 42 U.S.C. § 1396d. Section 138 of the Senate health care bill requires states to cover inpatient psychiatric services for adults between the ages of 21 and 65 as a specifically-enumerated service included in the definition of “medical assistance” effective October 1, 2018. As discussed above, states are required to provide the specifically-enumerated “medical assistance” services to individuals who were previously eligible for Medicaid before passage of the ACA and so homeless non-elderly adults who were previously eligible for Medicaid will have increased coverage for inpatient psychiatric services and homeless non-elderly adults who were eligible for Medicaid because of the ACA’s expansion for individuals with incomes less than 133% of the FPL may or may not have increased coverage for inpatient psychiatric services.
Homeless adults who need substance abuse treatment may have increased health care treatment for substance use. Current law allows states to provide Medicaid coverage for substance use treatment as “medical assistance” and requires states to provide the specifically-enumerated “medical assistance” services to individuals who were previously eligible for Medicaid before passage of the ACA and individuals who are eligible for Medicaid because of the ACA’s expansion for individuals with incomes less than 133% of the FPL. 42 U.S.C. § 1396d. As discussed above, the Senate health care bill moves individuals who are eligible for Medicaid because of the ACA’s expansion for individuals with incomes less than 133% of the FPL to a subclause that is not on the list of individuals who the state is required to provide the specifically-enumerated “medical assistance” services to in 42 U.S.C. § 1396d. Therefore, individuals who were previously eligible for Medicaid before passage of the ACA will likely be able to continue receiving substance abuse treatment under Medicaid, but the individuals who are eligible for Medicaid because of the ACA’s expansion for individuals with incomes less than 133% of the FPL may or may not receive Medicaid coverage for substance abuse treatment. In addition, section 202 of the Senate health care bill provides 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. The CBO estimates that this provision would increase spending by $2 billion over the 2017-2026 period.
Many homeless individuals who are enrolled or become enrolled in Medicaid or would become enrolled in Medicaid may not have coverage for as many health care services, including critical and life-saving prescription drugs in states that participate in the Medicaid Flexibility Program. As discussed above, current law requires that states provide specifically-enumerated services as “medical assistance” for eligible Medicaid enrollees, including prescription drugs. Section 134 of the Senate health care bill allows states to submit applications for a new Medicaid Flexibility Program beginning with FY20120 with targeted health assistance, including a proposed package of services to program enrollees to whom the state would otherwise be required to make medical assistance available under 42 U.S.C. § 1396a(a)(10)(A)(i). Subsection (d)(4) of section 134 lists the required services provided as targeted health assistance for enrollees in the Medicaid Flexibility Program as follows: (1) inpatient and outpatient hospital services, (2) laboratory and X-ray services, (3) nursing facility services for individuals aged 21 and older, (4) physician services, (5) home health care services, (6) rural health clinic services, (7) federally-qualified health center services, (8) family planning services and supplies, (9) nurse midwife services, (10) emergency medical transportation, (13) non-cosmetic dental services, and (14) pregnancy-related services. Subsection (d)(4) also requires states to provide mental health and substance use disorder coverage in its targeted health assistance provided to program enrollees under a Medicaid Flexibility Program. This subsection does not appear to require states to provide prescription drugs to enrollees in a Medicaid Flexibility Program, but mentions that if a state’s targeted health assistance to program enrollees under a Medicaid Flexibility Program includes assistance for prescription drugs, any requirements applicable to medical assistance for prescription drugs under a Medicaid state plan shall apply in the same manner to targeted health assistance for prescription drugs under a Medicaid Flexibility Program.
Many homeless individuals who are enrolled or become enrolled in Medicaid or would become enrolled in Medicaid may face greater premium and cost-sharing responsibility for deductibles, co-payments, or similar payments in states conducting a Medicaid Flexibility Program. Current law limits premiums and cost-sharing for individuals enrolled in Medicaid, including prohibiting premiums for individuals eligible under 42 U.S.C. § 1396a(a)(10)(A), except individuals receiving assistance on the basis of § 1396(a)(10)(A)(ii)(IX) with family income equal or exceeding 150% of the FPL, and limiting deductibles, cost-sharing, or similar changes to a nominal amount for individuals eligible under 42 U.S.C. § 1396a(a)(10)(A). 42 U.S.C. § 1396o. Section 134 of the Senate health care bill allows states that conduct a Medicaid Flexibility Program to impose deductibles, cost-sharing, or other similar changes to all program enrollees in a family not exceeding 5 percent of a family’s income for the year.
Homeless individuals who are eligible for Medicaid because of the ACA’s expansion for individuals may face greater health insurance instability. Section 130 of the Senate health care bill increases the frequency of eligibility redeterminations. Beginning on October 1, 2017, states are allowed to re-determine Medicaid eligibility every 6 months (or such shorter number of months as the state may elect) for individuals whose eligibility for Medicaid is determined based on application of modified adjusted gross income and who is eligible on the basis of the ACA’s expansion for individuals with incomes less than 133% of the FPL or between 133% of the FPL and the highest income eligibility level established under the state plan or a waiver. In states that implement more frequent eligibility redeterminations, homeless individuals who increase their income or who have fluctuating levels of income may lose health insurance or have periods without health insurance.
Many homeless individuals who are enrolled or become enrolled in Medicaid may lose Medicaid coverage because of a work requirement. Current law does not allow work requirements – separate or in addition to the work requirement for Temporary Assistance for Needy Families recipients – for individuals eligible for Medicaid, 42 U.S.C. § 1396u-1. Section 131 of the Senate health care bill allows states to establish an optional work requirement that conditions medical assistance to satisfaction of a work requirement for non-disabled, non-elderly, non-pregnant adults who are not age 19 and maintaining satisfactory attendance in secondary school or participating in employment-related education nor the only parent or caretaker of a child who has not attained 6 years of age or a child with disabilities beginning on October 1, 2017. The work requirement are “work activities” defined in section 407(d) of the Social Security Act, which includes: (1) unsubsidized employment, (2) subsidized private sector employment, (3) subsidized public sector employment, (4) work experience if sufficient private sector employment is not available, (5) on-the-job training, (6) job search and job readiness assistance, (7) community service programs, (8) vocational educational training for up to 12 months, (9) job skills training directly related to employment, (10) education directly related to employment for recipients who have not received a high school diploma or a certificate of high school equivalency, (11) satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence for recipients who have not received a high school diploma or a certificate of high school equivalency, and (12) the provision of child care services to an individual who is participating in a community service program. 42 U.S.C. § 607(d). Homeless individuals, especially those who are sleeping on the streets or must spend significant time obtaining food and shelter each day and night or who are traumatized, may not be able to satisfy this work requirement. The CBO estimates that some states would use work requirements to reduce enrollment and associated costs because caps on federal Medicaid spending would shift a greater share of the cost of Medicaid to states over time.
Overall, the CBO estimates that by 2026, 15 million fewer people will be enrolled in Medicaid coverage under the Senate health care bill than under current law.
Individual and Small Group Market Health Insurance Provisions
The Senate health care bill would likely increase enrollment in health insurance plans through the individual and small group market for homeless people with incomes less than the federal poverty level, would decrease the amount of cost-sharing available for these exchange health insurance plans, and would likely decrease the essential health services covered by the plans.
Premium levels for health insurance plans in the individual and small group market are expected to increase for older people, including older homeless people. Although premiums cannot vary based on enrollees’ health status or pre-existing medical conditions under the ACA or the Senate health care bill, older adults with health insurance coverage through the individual or small group market are likely to face higher premiums under the Senate health care bill than under the ACA. While the ACA permitted variation in premium rates based on age of 3 to 1, 42 U.S.C. § 300gg, section 204 of the Senate health care bill permits a 4 to 1 variation in premium rates based on age for plan years beginning on or after January 1, 2019.
Most homeless persons are not likely to be financially-impacted by proposed changes to premiums of insurance plans in the individual and small group market because of eligibility for premium tax credits. The CBO estimates that people eligible for premium tax credits would be largely insulated from changes in premiums because of eligibility for premium tax credits. The effect of higher premiums under the Senate health care bill is not likely to be felt by many homeless people who have low incomes below 100% of the FPL who will be newly eligible for premium tax credits and have most or all of the cost of the premiums covered by the premium tax credits that are available under the Senate health care bill nor likely be a significant burden for homeless people who may have incomes between 100% and 150% of the FPL or 150% to 200% of the FPL who will be eligible for similar levels of premium tax credits as under the ACA.
While the ACA provided premium tax credits for Americans with income between 100% and 400% of the FPL, it did not provide premium tax credits for those with incomes less than the FPL. 26 U.S.C. § 36B. Section 102 of the Senate health care bill would provide premium tax credits for Americans with income that does not exceed 350% of the FPL, including those with incomes between 0% and 100% of the FPL applicable to taxable years beginning after December 31, 2019.
The ACA modified the amount of the premium tax credits provided based on a percentage that varied with income. 26 U.S.C. § 36B. Subsection (b)(2) of section 102 of the Senate health care bill modifies the amount based on a percentage that varied with income and age applicable to taxable years beginning after December 31, 2019. The premium tax credits were the lesser of the premiums for one or more qualified health plans offered in the individual market within a state or the excess (if any) of the adjusted premium of the median cost benchmark plan over the amount of the taxpayer’s household income times the applicable percentage. Under the Senate health care bill, the percentage multiplier for people with income less than the FPL are only 2% for all age groups. This means that a single person with a modified adjusted gross income of $10,000 per year would receive a premium tax credit for all but $200 for the year (or $16.67 per month) under the latter premium tax credit calculation and those with lower incomes would be responsible for contributing even less per year (and per month). The percentage multipliers for people with low-incomes under 133% of the FPL are 2% under the ACA and vary from 2% to 2.5% under the Senate health care bill. The percentage multipliers are similar for people with incomes from 133% to 150% of the FPL ranging from 3.0% to 4.0% under the ACA and ranging from 2.5% to 4.0% under the Senate health care bill.
Although homeless persons may not be financially-impacted by the change in premiums, some may be not receive the same level of health care by the proposed changes to coverage of health insurance plans. Whereas the ACA provided premium tax credits for the second lowest cost silver plan, 26 U.S.C. § 36B, section 102 of the Senate health care bill would replace the second lowest cost silver plan with 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.
Although non-elderly, non-disabled adults with incomes less than the FPL will likely have lower out-of-pocket costs they incur if they receive emergency treatment, hospital care, or other expensive medical care or drug expenses, individuals who previously had health insurance who use their health care insurance and incur health care expenses will have larger out-of-pocket costs under the Senate health care bill than under the ACA. The ACA covers more of the health care costs because it provides both premium tax credits and cost-sharing subsidies, including reducing the cost-sharing by reducing the out-of-pocket limit by two-thirds for enrollees with household income more than 100% but not more than 200% of the FPL and increase the plan’s share of the total allowed costs of benefits provided to 94% of such costs to enrollees with household income not less than 100% but not more than 150% of the FPL, 42 U.S.C. § 18071, which the CBO estimates would provide for an approximate deductible of $300 compared to the average deductible of $3,600 in 2017. Section 208 of the Senate health care bill repeals the ACA’s cost-sharing subsidies effective December 31, 2019. The CBO estimates that people with low income below the FPL who expect to have high use of health care would be enrolled in an individual or small group market plan and be subject to a deductible that would be equal to a large portion of their household income.
Individuals with health insurance through the individual or small group market are likely to not be covered for some essential health services under the Senate health care bill compared to under the ACA. The ACA requires benchmark coverage or benchmark-equivalent coverage that includes the following essential health benefits: (1) ambulatory patient services, (2) emergency services, (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care. 42 U.S.C. § 18022(b). On the other hand, subsection (b) of section 126 of the Senate health care bill sunsets the essential health benefits requirements on December 31, 2019 so that the benchmark coverage or benchmark-equivalent coverage must still include the following basic services: (1) inpatient and outpatient hospital services, (2) physicians’ surgical and medical services, (3) laboratory and X-ray services, (4) coverage of prescription drugs, (5) mental health services, (6) well-baby and well-child care, including age-appropriate immunizations, and (7) other appropriate preventive services, as designated by the Secretary. 42 U.S.C. § 1396u-7. With the basic services similar to the essential health benefits, individual with incomes less than the poverty level who are newly eligible for premium tax credits will likely be able to receive more health care services and other individuals who already had health insurance through the individual or small group market are likely to still receive similar health care services, except for select services such as maternity care.
Overall, the CBO estimates that by 2026, 7 million fewer people will be enrolled in the individual and small group market under the Senate health care bill than under current law.
Health Center Provisions
For the services available at Health Centers, for individuals who are not yet enrolled in Medicaid or in another health insurance plan or who cannot afford the premiums, there is proposed additional funding for Health Centers for one year, but no additional funding is proposed for any later year. Current law authorized mandatory spending of $8.3 billion for Health Centers in FY2017, the last year funds are authorized to be appropriated for the program. See 42 U.S.C. § 254b; Medicare Access and CHIP Reauthorization Act of 2015, Pub. L. No. 114-10 (2015). The Senate health care bill provides additional mandatory funding for Health Centers. Section 203 of the Senate health care bill provides an additional $422 million for Federally-qualified Health Centers for FY2017. The CBO estimates that implementing this provision would increase mandatory spending by $422 over the 2017-2026 period.
In conclusion, the CBO estimates that approximately 22 million fewer people will be enrolled in Medicaid and the individual and small group market and a similar number of additional people will be uninsured under the Senate health care bill than under current law.
