House GOP plans to keep some Medicaid expansion — and steer money to states that never bought in

February 24 at 5:55 PM
Congressional Republicans have been struggling for months to resolve one of the most vexing problems in their tortuous effort to replace the Affordable Care Act: What to do about the generous federal funding for states that broadened their Medicaid programs under the law, while not shortchanging the 19 states that balked at expansion?

Now, as the House begins to finalize details of its legislative proposal, a possible compromise has emerged. It would temporarily keep federal dollars flowing to cover almost the entire cost of the roughly 11 million Americans who have gained Medicaid coverage but would block that enhanced funding for any new participants.

At the same time, the GOP approach would open a fresh spigot of aid for the states — all but one of which has a Republican governor — that eschewed the additional Medicaid money because of their elected officials’ antipathy to the law. This extra aid would probably go to hospitals with a large share of poor and uninsured patients.

The Solomon-like strategy is an attempt to calm fears of Republican governors in expansion states that abolishing the 2010 law would cost them hugely, while also satisfying new demands for equity from other GOP governors who opposed the expansion. ­Details of how the plan’s dual elements would be implemented, including their specific time frames and funding totals, are still coming together in the House Energy and Commerce Committee.

Within the context of the GOP’s broader repeal effort — and this week’s tumultuous town hall meetings around the country, at which lawmakers have been confronted by constituents scared of losing their health coverage — Republicans’ ideas for Medicaid’s future have drawn less public attention. Yet their proposals would significantly remake one of the nation’s largest entitlement programs, which serves more than 74 million lower-income Americans and accounts for half the additions to the insurance rolls that the ACA has brought about.

A similar approach is under consideration in the Senate. Sen. Rob Portman (R-Ohio), who is working toward a compromise to protect the roughly 700,000 Ohioans with Medicaid coverage ­under the ACA, said he is open to either a temporary extension or another way to subsidize their health insurance. “It’s necessary to figure out how to provide coverage, and that’s going to cost money,” he said Thursday.

The House committee also is moving forward with a plan to convert the rest of Medicaid to a system in which states would get a fixed sum of federal money for every resident who is enrolled. Such per capita funding, outlined by the chamber’s Republican leaders earlier this month, would be more restrictive than the way Medicaid has functioned since its birth as part of the Great Society legislation of the 1960s.

However, the allotments would be less rigid than block grants, which have been advocated for years by many conservatives and decried by liberals for their potential to reduce spending over time, prompting states to cut benefits or eligibility, or both. (Block grants might still emerge from Congress as an alternative that states could choose.)

This picture of the House’s ­behind-the-scenes work is based on interviews with several people familiar with the thinking of the Republican leadership. All spoke on the condition of anonymity since no plans have been announced.

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