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Capitol Correspondence - 06.18.17

Opinion Piece Highlights Issue of State Inequities in AHCA

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On June 16, Rodney Whitlock and Katie Weider, both of ML Strategies, authored an opinion piece published by Forbes titled, “Senators Must Address a Critical Stumbling Block to Changing Medicaid: State Envy.” (ANCOR is currently engaging Mr. Whitlock and Ms. Weider as external lobbyists.) The article highlights one problematic issue with the American Health Care Act (AHCA) – the inequities between states that will occur if proposals in the House-passed bill are carried through to the Senate. The authors note that “some states fill financially benefits more than other states under the per captia cap.” It goes on to say, “states that have worked to control costs of their Medicaid program through the use of innovative cost saving strategies, Medicaid managed care, or lower provider payments. On the other hand, a per capita cap could reward states with high spending Medicaid programs.” “Trapping” states at their FY2016 spending levels would create downward pressure across the system, worsening the existing problem of a lack of providers willing to accept Medicaid patients in some places.
The authors note that states could opt to get more federal dollars through the greater base payment in the block grant option that emerged in the House-passed version of the AHCA. However, doing so presents its own risks, particularly that by agreeing to a block grant, a state makes a ten-year commitment to working within a fixed federal share, with no ability to adjust for population changes. If there is a need to cover more people based on an economic downturn or other unanticipated needs, a state would be locked in to the block grant, posing a significant risk.