Capitol Correspondence - 05.22.17

CBPP Issues Report on Impact of Medicaid Cuts to HCBS

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On May 18, the Center on Budget and Policy Priorities issued a report on the impact the Medicaid cuts contained within the American Health Care Act (AHCA) would have on home and community based services (HCBS). The report found that converting the mechanism for funding Medicaid from an open-ended entitlement to states to a per capita cap system, with a fixed dollar amount provided to states based on 2016 enrollee spending, would create state budget shortfalls that would worsen over time. Because the AHCA does not make changes to the mandatory spending requirements within the Medicaid program, states would have to make up the difference through increased state spending, or cut optional programs, which include HCBS. 
The report further notes that Medicaid is already “highly efficient, covering people at lower costs than private insurance and with slower growth in per-beneficiary costs over time”. The populations likely to see the most significant impact are seniors and people with disabilities. The report also notes the challenges the capitated system would make to the provision of long term services and supports, which continue to be a major driver of Medicaid costs.