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Medicaid Cuts in the Senate Repeal Bill:

Quantifying the Fiscal Harm to Your State

Impact of BCRA Medicaid Provisions - As Explained by 4 Tables

Table 1 shows the state-by-state impact on federal Medicaid funding of the per capita
cap; the changes to expansion financing; and the combined impact of the cap and
expansion financing changes.

The estimates are provided for a scenario under which states eliminate expansion as of 2021
and a scenario under which they maintain it.

All states:

Between FY 2020-FY 2026, federal Medicaid spending will be cut by between


$347.3 and $695.8 billion, depending on whether states maintain expansion
coverage after FY 2020 when the enhanced FMAP is reduced

Among the 31 states and D.C. that have expanded Medicaid, the losses will be
greater. If these states respond by eliminating expansion when enhanced funding
first declines, they would see an estimated 27 percent reduction in federal
Medicaid funding and more than 11 million low-income adults could lose
coverage starting in 2021.

Illinois:
Illinois will experience cuts between 10.6 billion and 23.6 billion depending on
whether the state maintains expansion coverage after FY 2020 when the
enhanced FMAP is reduced
If IL Drop Expansion Coverage After FY 2020: $23.6 billion cut
If IL Maintain Expansion Coverage: $10.6 billion cut
Table 2 shows the impact on state Medicaid spending if states replace the federal
funds lost due to the phasing out of enhanced expansion funding to maintain
expansion with state dollars, as well as if they replace the federal cuts attributable to
the per capita cap with their own funds.

States Will Have to Spend More to Maintain Coverage - If state wanted to maintain spending
or expansion under per capita, how much would that cost states to maintain financing?

All states:

Between FY 2020-FY 2026, states would have to spend up to an additional $347.3


billion to make up for federal expansion and per capita cap cuts a 17% increase in
state Medicaid spending overall
If non-expansion states chose to replace lost federal funding under the per capita
cap, it would increase their state spending by 9.3%

Illinois:

Between FY 2020-FY 2026, IL would have to spend up to an additional $10.6 billion


to make up for federal expansion and per capita cap cuts a 14.7% increase in state
Medicaid spending overall

Illinois would need to increase their own spending by an estimated $5.8 billion
between FY 2020 and FY 2026 to maintain expansion. On average, the increase in
state spending required to maintain expansion for this period represents a 8.0
percent increase
Table 3 shows the number of low-income adults that would lose Medicaid
coverage starting in FY 2021 if states eliminate their expansions, as well as the
share of Medicaid beneficiaries that this would represent.

Projected Impact on Medicaid Enrollment

All states:

If all states eliminated expansion in response to federal cuts, more than 11 million
people would lose Medicaid coverage
On average, expansion adults make up more than 25% of all Medicaid enrollees in
expansion states

Illinois:
If Illinois does not replace lost federal funds with state funds to maintain expansion,
more than 658,000 people could lose coverage starting in 2021, accounting for 22
percent of Medicaid beneficiaries in Illinois (Table 3)

More than 21.9 percent of all Medicaid beneficiaries could lose coverage in Illinois

On average, expansion adults make up more than 22.8% of all Medicaid enrollees in
ILLINOIS

These estimates only consider the impact from the loss of expansion; additional
coverage losses may occur due to the per capita cap, particularly in later years when
it becomes tighter on states.
Table 4 illustrates the impact of the per capita cap reductions on children, seniors,
people with disabilities and low-income adults if states spread the cuts that they
must make to avoid exceeding the per capita cap evenly across all eligibility
groups between FY 2020 and FY 2026. In practice, states will need to decide how
to distribute the cuts.

Potential Impact of Per Capita Cap by Eligibility Group

All States:

If distributed proportionately across all eligibility groups, seniors and people with
disabilities would experience the greatest reductions in federal spending compared to
other eligibility groups
In practice, states will need to decide how to distribute the cuts

Illinois:

Between FY 2020 and FY 2026, the cap could reduce federal spending by an estimated
$3.6 billion.

Unless Illinois offsets all of the federal cuts with an increase in spending from their own
resources, they will need to reduce reimbursement rates, cut benefits, increase cost
sharing or use other strategies to keep their spending below the cap.

If distributed proportionately across all eligibility groups, federal spending reductions


would total $0.9 billion for seniors, $1.4 billion for people with disabilities, $1.0 billion for
children, and $0.3 billion for low-income adults
Table 5 shows on a national basis the year-by-year change over time in the size of
federal reductions for the per capita cap, the changes in expansion financing, and
the combined effect of these two provisions. It presents the impact under two
scenarios one in which all states maintain expansion and one in which they
eliminate it.

Federal cuts will accelerate when trend drops to CPI in FY 2025


For states maintaining expansion, federal cuts also increase markedly when enhanced
funding is eliminated entirely in fiscal year 2024.

Redistribution among 18 High and Low Spend States

Under BCRA, an additional adjustment is made to states aggregate cap if per capita
spending is significantly above or below the mean for all states
o States above mean by 25% or more: Cap will be decreased the following year
by .5% to 2%
o States below mean by 25% or more: Cap will be increased the following year
by .5% to 2%

Redistribution excludes states with low population density

In FY 2020 and FY 2021, adjustment will be based on states average per capita
spending across all eligibility groups

In FY 2022+ and on, the adjustments will be made for each eligibility group;
o As a result, some states may receive a downward adjustment for one eligibility group
and an upward adjustment for another

"High" and "Low" Spend States Potentially Affected by BCRA Redistribution: FY 2020
and FY 2021

----this chart just came Explaining if Illinois was a High or Low spending state, I might
need yall's help interpreting what it means. Here's what the colors mean in the chart:

State 25% or more above mean per enrollee spending and subject to a downward cap
adjustment of between 0.5% and 2%.

State 25% or more below mean per enrollee spending and subject to an upward cap
adjustment of between 0.5% and 2%.
Really messed up things about how caps are set:

Under BCRA, states could select a base period consisting of any eight consecutive calendar quarters
between FY 2014 and the third quarter of FY 2017.
At first (starting in 2020), BCRAs per capita caps would grow at the Consumer Price Index
Medical (CPI-M) inflator for most enrollees, and CPI-M plus 1 percentage point for disabled
adults or age 65 or older.
But starting in 2025 the Senate bill would make far deeper cuts in Medicaid by dramatically
slowing the growth of the per capita caps for all enrollees to Consumer Price Index for all urban
consumers (CPI-U).
o This shift would push more costs onto states, but conveniently (for the Senate GOP
leadership) it is barely captured at the tail end of the CBOs 10-year score window.
Projected Spending Growth Relative to BCRA Caps
However, over time these trend rates are really volatile and - CBO projections might be exactly
right, and that's why it could be such devastating impact
o Per enrollee spending is projected to grow more quickly than the trend rates established
in the BCRA for all eligibility groups except aged through 2024
o Starting in 2025, all groups are projected to substantially exceed the trend rate
CPI often decreases during economic downturns, which means states per capita caps would
grow at slower rate - making it even easier for states to hit their caps.
In 2009 CPI hit negative levels; in this scenario, states caps could even shrink from one year
to the next.

Estimated Impact of Per Capita Cap across All States - Why this Sucks

Impact of the per capita cap projected to result in total (federal and state) cuts of more than
$267 billion between FY 2020-2026, assuming States keep spending under the caps
Reductions more than double between 2024 and 2026and would continue to deepen over
timeas a result of use of CPI as the trend rate beginning in 2025
Thus, States rather than the federal government bear the risk if future spending pressures
lead growth to exceed the trend rates (CPI or medical CPI) that determine the size of per capita
cap cuts.
In these estimates, we assume that Medicaid spending will grow at rates projected by the
Centers for Medicare & Medicaid Services (CMS) Office of the Actuary:
o Medical CPI growth at 3.7% and
o CPI growth at 2.4%, based on Congressional Budget Office (CBO) national
projections
Under a per capita cap, however, states bear the full risk for any spending in excess of the
allowable trend rates, which are themselves volatile and difficult to predict.
o For example, if medical CPI happens to come in at 3.2 percent rather than the 3.7
percent currently projected by CBO federal spending reductions from the per capita
cap would increase from an estimated $154.2 billion to $230.8 billion.
o Conversely, if medical CPI is higher than expected, it would create a more generous cap
for states, reducing the size of cuts.
For example, if medical CPI were 4.2 percent rather than the 3.7 percent
projected by CBO the size of federal cuts attributable to the per capita cap
would drop to $75.4 billion