State and Federal Threats to Healthcare 

Affordable Care Act

Since 2010, the Affordable Care Act has increased the number of insured Americans as a result of the individual insurance mandate and its Medicaid expansion element. Federal attacks on the ACA will continue as this administration prioritizes disinvestment in healthcare in order to shift wealth from low and middle income Americans to the wealthy.

If the ACA is repealed,

            • More than 23M more uninsured Americans
            • Nearly $1 Trillion in Medicaid savings over next decade
            • Elimination of the ACA’s consumer protections, civil rights requirements and insurance company regulations

Medicaid

Medicaid is the nation’s largest health insurer, and is more efficient and lower cost than other insurance programs. Furthermore, Medicaid is integral to the healthcare infrastructure and plays a crucial role in state government budgets. However, like all purchasers of healthcare, Medicaid feels the pressure of rising healthcare costs, which have long grown at rates higher than the general economy.

If Medicaid is cut or financially restructured to block grants,

                • 526,000 Tennesseans stand to lose health coverage
                • Ends Medicaid expansion, keeps TN from joining 31 states that have expanded coverage under the ACA, leaves 280,000 still uninsured.
                • Widens income inequality

Medicaid cuts affect TN’s healthcare infrastructure

                • 1.5 M Tennesseans rely on TennCare for coverage
                • 61% of nursing home care is covered by TennCare
                • Over half of births and half of all TN children are covered by TennCare

Medicaid cuts affect Tennessee’s state budget

                • Over 20¢ of ever dollar in state budget is federal Medicaid funding
                • Proposed federal Medicaid cuts of $500 M/year, increasing in future years, are too big to handle just with TennCare cuts
                • ALL aspects of the state budget, including K-12 and higher ed, will sustain cuts

CHIP (CoverKids)

CHIP has traditionally received bipartisan support; however, CHIP  has to be renewed by September, and in the current partisan political environment, its future is uncertain.

  • In 2015, 95% of children had health coverage, the highest rate ever. This progress would be reversed if caps are imposed or cuts are made to Medicaid in any significant way.
  • Medicaid covers 37 million children nationally. CHIP covers 8.4 million children. 885,000 Kids in TN rely on TennCare and CoverKids. 52% of TennCare recipients are children.
  • Funding for CHIP expires on September 30, 2017. CHIP is a block grant that relies on Medicaid covering the majority of lower income children with greater healthcare needs and fewer financial resources.
  • Administrative costs for Medicaid are half the rate of most private insurance companies.
  • In 2015, 41% of individuals covered by Medicaid are children but children only account for 19% of Medicaid spending, with an average annual cost per child of $3,389.
  • Medicaid eligibility for pregnant women and children improves health throughout childhood and into adulthood. When pregnant women have access to Medicaid, newborns in low-income families have a better shot at a healthy delivery and strong start during their critical first year of life. They go on to have healthier childhoods including reduced rates of obesity, hospitalizations, and improvements in oral health.
  • Medicaid eligibility leads to improvements in educational outcomes at the elementary, high school and college levels. One study found that increases in Medicaid/CHIP eligibility at birth led to improvements in reading test scores in the 4th and 8th grades. Another study found that increases in childhood Medicaid eligibility decreased the likelihood of students dropping out of high school and even increased the likelihood of college completion.
  • Children enrolled in Medicaid miss fewer school days due to illness or injury, do better in school, are more likely to graduate high school and attend college, grow up to be healthier adults, earn higher wages, and pay more in taxes.

SNAP

SNAP was created with strong bipartisan support and has been the nation’s first line of defense in the fight against hunger for nearly fifty years. Relative strength of the economy makes SNAP especially vulnerable to cuts and structural changes. Federal threats such as converting SNAP to a block grant would effectively restrict eligibility and/or reduce funding.

SNAP cuts will hurt children, seniors, and our economy

      • 1.1 M Tennesseans rely on SNAP to make ends meet including 1 in 3 children
      • In Tennessee alone, SNAP is:
          • An $800 M child nutrition program
          • A $130 M senior nutrition program
          • A $140 M nutrition program for adults with disabilities
          • A $600 M income subsidy for the working poor
      • 1 in 7 grocery dollars spent in TN comes from SNAP

Federal Block Grants

These programs have bipartisan support, but are vulnerable as they are seen as bargaining chips. The President’s budget calls for major cuts to the National Institute for Health and the medical research that NIH funds.

TN Legislature Refuses to Close the Coverage Gap

The TN legislature has thus far refused to close the coverage gap and adjourned for the year in early May. The legislative inaction left 280,000 Tennesseans without federally funded healthcare.

By refusing to close the coverage gap, state lawmakers have sent $1 billion per year of Tennesseans’ federal tax dollars to other states that was earmarked by Congress to provide coverage for Tennesseans. The legislature’s actions have increased premiums for private insurance and destabilized the insurance Marketplace. As a result, insurance providers pull out of the Marketplace (such as Humana in East Tennessee), and leave Tennesseans who receive insurance through the Marketplace questioning if their health coverage is at risk.

Closing the coverage would have provided hard-working Tennesseans with health insurance, funded hospitals and clinics that all Tennesseans rely no, and created jobs. Unfortunately, the legislature’s ongoing failure to allow its constituents to access the care they need is sabotaging the health care system for all Tennesseans.
 

Current Status of the ACA repeal and Medicaid cuts

What’s Happened So Far?

  • On May 4th, the House passed the American Health Care Act (“AHCA”).
  • On May 24th, the Congressional Budget Office released a revised score on the AHCA which found that 23 million people would lose coverage and Medicaid funding would decrease by $834 billion. CBO also determined that the AHCA would save $119 billion.

 

What’s Next?

  • Senate Republicans met on June 7th to negotiate a consensus on how they would alter the AHCA. Although there is little public information available, we are hearing that there may be some changes to the options that state have for waivers and that there may be changes to the timeline for ending Medicaid expansion. We believe that the substantial cuts to Medicaid and the per capita cap will remain in the bill but that the option for a block grant will be eliminated. Essentially this means that the majority of the provisions in the House version will be in the Senate bill.
  • We are hearing that they intend to send language to the Congressional Budget Office by Friday and hope to have a CBO score for their version of the bill by the end of next week. As a reminder, the Senate version must save at least the $119 billion that CBO estimated the House version would save.
  • Once CBO releases a new score, Senate leadership can offer their version of the legislation as a substitute for the bill passed in the House and move to take a vote.
  • We are hearing that Senate leadership aims to hold a vote before the Fourth of July Recess, which begins July 1st. This means there may be a vote as early as the week of June 19th but it is more likely that the vote will occur the week of June 26th.
  • Currently, it is unclear whether the Republican leadership has the votes for passage and may not have the votes locked down even when the bill hits the Senate floor. Leadership will be working the Senators to vote yes from now right up to the roll call vote on the floor.
  • When the bill goes to the Senate floor, Senate rules require 20 hours of debate before a vote followed by unlimited amendments (vote-a-rama). Only 51 votes are required to pass budget reconciliation in the Senate.
  • Since the Senate will not pass the same bill as the House, the legislation will either go to a conference committee or directly back to the House for a final vote. If the bill makes it through these steps, Congress would send the bill to the President for his signature.
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