CBO: Impact of Senate Bill’s Medicaid Cuts Would Grow Over Time

Federal spending on Medicaid would decrease by 35 percent in 2036

Senate Republican leadership postponed a vote on its health care legislation until after the July Fourth recess. (Bill Clark/CQ Roll Call)
Senate Republican leadership postponed a vote on its health care legislation until after the July Fourth recess. (Bill Clark/CQ Roll Call)
Posted June 29, 2017 at 5:04pm

Federal spending on Medicaid would decrease by 35 percent over the next two decades under the Senate Republicans’ health care measure, according to a Thursday report by the Congressional Budget Office. That compares to a smaller 26 percent decrease after one decade under the legislation.

States would need to find different ways to deliver Medicaid services, such as committing more of their own resources to the program, cutting payments to providers and issuers or restricting eligibility for enrollment after the next decade, the report says.

The analysis, which considers the effects of spending over 20 years under the Senate GOP discussion draft that was first released last week, says that federal spending would be reduced by $160 billion in 2026 compared to under current law. The GOP proposal is meant to roll back the 2010 health care law and change the Medicaid program, and is somewhat similar to a bill passed by the House in May.

The Senate proposal would make major changes to the Medicaid program by phasing out the health care law’s expansion in 2021 and transitioning to a system of capped federal funding in 2020. In 2025, the amount of funding a state would receive per beneficiary would be tied to the consumer price index for all urban consumers, a lower growth rate than medical inflation.

An initial 10-year CBO analysis of the legislation released Monday projected that 22 million additional individuals would be uninsured by 2026 under the Senate bill. The analysis showed that premiums would continue to increase for two years and then decrease in 2020, when much of the overhaul would take effect.

Democrats jumped on Thursday’s report to highlight how the proposed cuts would get worse over time.

“These cuts will leave states with unfathomable ‘choices’ like whether sick children get essential treatment or pregnant women get pre-natal care or older Americans can receive adequate nursing home care,” Oregon Sen. Ron Wyden, the ranking member of the Senate Finance Committee and one of the senators who requested the report, said in a statement.

David Popp, a spokesman for Majority Leader Mitch McConnell of Kentucky, took issue with descriptions of the proposal as a “cut,” noting that spending would be higher two decades later.

The report comes as Senate Republicans are struggling to revise their legislation to reach a consensus that 50 of their 52 members could accept. GOP leaders had hoped to strike a deal to revise the 2010 law by the end of this week. That was proving difficult as the Senate wrapped up official business ahead of the July Fourth recess on Thursday afternoon.