MYTH vs. FACT: The Senate bill, Medicaid expansion, and per capita cap reforms

Congressional Documents & Publications

MYTH: Congress is going to end the Obamacare Medicaid expansion.

FACT: The Senate draft, the Better Care Reconciliation Act (BCRA), actually codifies the Obamacare expansion of Medicaid to able-bodied, childless adults.

Congress is proposing to simply equalize over seven years' time the federal matching payment to states for coverage of able-bodied, childless adults to the same rate that a state receives for every other Medicaid beneficiary (the aged, disabled, children, and low-income families).

MYTH: The current Medicaid program is sustainable.

FACT: No government program can grow faster than the economy in perpetuity without eventually causing a crisis. Every decade since it was created, Medicaid has grown faster than the economy, a trend the Congressional Budget Office (CBO) projects to continue under current law. The Senate bill would put Medicaid on a sustainable fiscal path beginning eight years from now.

MYTH: Congressional proposals kick millions of people off the Medicaid program.

FACT: No one is kicked off the program, and no one loses their federal Medicaid eligibility.

CBO makes a highly dubious prediction that millions who are eligible for free health insurance will refuse free Medicaid coverage if the individual mandate is repealed.

Further, CBO also predicts that millions of people, who are currently living in non-expansion states and thus are not even eligible for Medicaid today, do not become eligible for Medicaid. CBO assumes their states would have eventually expanded under current law, but will not do so under congressional proposals.

Finally, CBO forecasts that some states, although CBO doesn't say which ones, will reduce or cancel Medicaid expansion if they are asked to pay their traditional fair share (as opposed to having the federal government pay nearly the entire cost of expansion).

MYTH: Reducing the rate of growth of the per capita cap to CPI-U amounts to a "cut."

FACT: In addition to allowing for unlimited enrollment growth, the BCRA allows per beneficiary spending to grow at CPI-M or CPI-M+1%. Per beneficiary spending under the cap would only begin growing at the CPI-U index eight years later in 2025. This modest change, which ensures Medicaid's growth rate is unlikely to outpace the economy, makes significant progress in ensuring Medicaid is sustainable and available for future generations.

MYTH: Per capita caps are a partisan idea.

FACT: Medicaid per capita caps were originally proposed by the Clinton Administration. In fact, it was once supported by current Senators Patrick Leahy, Patty Murray, and Dianne Feinstein, along with former Senators Joe Biden, Barbara Boxer, Tom Harkin, Ted Kennedy, Harry Reid, and John Kerry.

SUPPLEMENTAL INFORMATION

Every decade since it was created, Medicaid has grown faster than the economy.

The Congressional Budget Office (CBO) projects that under current law, Medicaid will continue to grow at a much faster rate than the economy.

CBO March 2016 baseline (dollars in billions)

Per capita caps for Medicaid are a reform originally proposed by the Clinton Administration. In fact, it was once supported by current Senators Patrick Leahy, Patty Murray, and Dianne Feinstein, along with former Senators Joe Biden, Barbara Boxer, Ted Kennedy, Tom Harkin, Harry Reid, and John Kerry.

Congressional Record (Senate - December 22, 1995)

Mrs. MURRAY. Mr. President, I hold in my hand today a letter to President Clinton that is signed by all 46 members of the Democratic Caucus. This letter urges him to hold firm to our commitment to basic health care for children, pregnant women, the elderly, and the disabled in this country. This letter supports a per capita cap approach to finding savings in the Medicaid Program.

Washington DC, December 13, 1995.

President William J. Clinton,

The White House,

Washington, DC.

Dear Mr. President: We are writing to express our strong support for the Medicaid per-capita cap structure in your seven-year budget. We have fought against Medicaid block grants and cuts in the Senate, and we are glad you acknowledge the importance of our position.

We support a balanced budget. We are glad you agree with us that we can balance the budget without undermining the health of children, pregnant women, the disabled, and the elderly.

The savings level of $54 billion over seven years included in your budget will require rigorous efficiencies and economies in the program. However, after consulting with many Medicaid Directors and service providers across the country, we believe a reduction of this level is possible to achieve without dramatic limits on eligibility or cuts to essential services. States will need flexibility to achieve these savings, and you have taken steps toward granting it in your bill.

We were encouraged that your Medicaid proposal does not pit Medicaid populations against one another in a fight over a limited pot of federal resources.

We were further encouraged to hear Chief of Staff Panetta relay your commitment to veto any budget not containing a fundamental guarantee to Medicaid for eligible Americans.

We commend you on the courage you have exercised in making these commitments to Americans eligible for Medicaid. There is a bottom line when it comes to people's health; do not allow the current Congressional leadership to further reduce our commitment to Medicaid beneficiaries.

Your current proposal is fair and reasonable, and is consistent with what we have advocated on the Senate floor. We urge you in the strongest possible terms to hold fast to these commitments in further negotiations. We are prepared to offer any assistance you may need in this regard.

Sincerely,

Bob Graham; John Breaux; Jay Rockefeller; Herb Kohl; Patrick Leahy; Frank R. Lautenberg; Ted Kennedy; Tom Daschle; Patty Murray; Barbara Boxer; David Pryor; Barbara A. Mikulski; Max Baucus; Paul Simon; Kent Conrad; Wendell Ford; Harry Reid; Paul Wellstone; Richard H. Bryan; Ernest Hollings; Dianne Feinstein; Tom Harkin; Byron L. Dorgan; Chris Dodd; J. Bennett Johnston; Joe Lieberman; Paul Sarbanes; Carol Mosely-Braun; John Glenn; Jeff Bingaman; Carl Levin; Bill Bradley; John F. Kerry; Bob Kerrey; Joe Biden; Daniel K. Akaka; Dale Bumpers; Daniel Inouye; Chuck Robb; J. James Exon; Howell Heflin; Claiborne Pell; Russ Feingold; Daniel P. Moynihan; Sam Nunn; Robert C. Byrd.