WASHINGTON — Indiana could lose up to $1.5 billion in federal Medicaid funding between 2020 and 2026 under the latest GOP proposal to repeal large sections of the Affordable Care Act (ACA), according to an analysis of the bill from the nonpartisan Kaiser Family Foundation.
While the bill was undergoing revisions Monday afternoon to appease moderate and conservative GOP holdouts, the Senate is still expected to vote on the proposal later this week.
The bill – introduced this month by Republican Sens. Lindsay Graham and Bill Cassidy – would transform Medicaid into a block grant program administered by the states, which would have more flexibility in designing their own programs, and would eliminate an unpopular ACA provision requiring most Americans to have health insurance or pay a fine.
But the bill would also shift federal Medicaid funding away from states that expanded the program under the ACA to states that chose not to expand Medicaid coverage and would introduce spending caps per enrollee.
The Kaiser Foundation analysis estimates that Medicaid expansion states – including Indiana – would collectively lose about $180 billion in federal funding between 2020 and 2026, while states that did not expand Medicaid would see a net increase of $73 billion in federal subsidies during that period.
Medicaid insures about 72 million Americans, including the poor, disabled, elderly, children living in poverty and a majority of nursing home patients.
The ACA expanded Medicaid eligibility to the working poor as well, but states had to opt-in to receive federal funding.
Indiana did so in 2014 when then-Gov. Mike Pence negotiated a modified version of the expansion through the state’s HIP 2.0 plan, which insures about 400,000 Hoosiers.
If the Graham-Cassidy bill is approved, states would be forced to either scale back Medicaid benefits, restrict eligibility, hike premiums or raise taxes to cover what the federal government will no longer pay.
This would have a significant impact in Wabash County, where about 21 percent of the population receives some form of Medicaid benefits, according to data from the Indiana Family and Social Services Administration.
Gov. Eric Holcomb lent his support to the latest repeal bill last week when he co-signed a letter with 14 other GOP governors urging Congress to support the Graham-Cassidy proposal.
Holcomb has stated on multiple occasions that he would support legislation granting states more freedom to design their own programs for health care. Before the latest ACA repeal bill was presented, Holcomb applied for a federal waiver to allow Indiana to institute work requirements on a small number of Medicaid beneficiaries, a sign of the direction the governor would like the program to take in Indiana.
Democratic Sen. Joe Donnelly came out in opposition to the latest repeal effort last week, stating that bipartisan talks to stabilize the ACA should ensue instead. His Republican colleague Todd Young has yet to confirm a position on the bill.
Patient groups, hospital associations and insurance industry representatives have been nearly united in their opposition to the Graham-Cassidy proposal.
Last week, the Indiana Hospitals Association released its statement against the bill after reviewing the proposal for more than a week.
“We believe that the bill’s financing provisions would create major uncertainty for Indiana’s health coverage programs,” the IHA said. “Reductions in funding for the traditional Medicaid program and creation of a fiscal cliff for HIP 2.0 in 2026 are major concerns. The IHA asks Congress to reject the proposed legislation and refocus on bipartisan solutions for stabilizing the individual insurance market.”
Republicans will have until Sept. 30 to pass the bill under special budget rules that allow the Senate to pass legislation with a simple majority rather than the traditional 60 votes.
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