"Cuts" to existing Medicaid under "private option" are not cuts in service | Arkansas Blog

"Cuts" to existing Medicaid under "private option" are not cuts in service

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  • Rep. John Burris

You may have heard talk about "cuts to the existing Medicaid program" as a cost-saving feature of the "private option."

Here's an important nuance to keep in mind: these "cuts" are in fact transfers and savings that would have happened under the original Medicaid expansion plan. The only difference is that whereas before, this would have happened within the Medicaid program, now the coverage will move from Medicaid to the exchange. It's an important point, because the idea of slashing services to the extremely sick/poor current Medicaid eligible pool to give more to the less sick/poor expansion pool is awful. But that's not what's happening.

Let's look at a few examples. Currently, pregnant women under 200 percent of the federal poverty level are Medicaid eligible. Under expansion, in the future, women between 17-138 FPL will already be covered. They'll get the higher expansion match rates, so it will save the state money. Under the old plan, they were "transfer populations" within the Medicaid program. Under the new plan, they're going from Medicaid to the exchange — or more to the point, they'll never need Medicaid in the first place because they'll already be covered (on the exchange, on the government's dime). It's the exact same money-saver due to match rates. That's not a cut.

Likewise, savings from uncompensated care — no different from the original Medicaid expansion plan. For example, if the gov spends $X on uncompensated care at a community clinic or a prison, they would no longer have to spend that money under Medicaid expansion because those folks will be covered by federally matched Medicaid. Only difference under the "private option" is that they'll be covered by federally matched exchange. That's not a cut.

I have confirmation from both DHS and Rep. John Burris that these sorts of features — which were cost savings under the original Medicaid expansion plan — are what they have been discussing, both via emails between them and in public statements from Burris.

This is the point where we pause to take a moment to slap our heads because these are savings and transfers that DHS identified months ago under Medicaid expansion. It's the same money! Republicans didn't believe their numbers back then. Okay, heads slapped, let's move on...

My read on this is that it's politically advantageous for Burris to refer to these as "cuts" even though that's not true in any meaningful sense. One gets a sense for this with Republicans' dead-on-arrival initial tag for their idea: "Medicaid contraction."

But in fairness to Burris, he believes that there is an important substantive difference. Basically, he thinks the Medicaid program is a broken system, so anything that involves anyone leaving Medicaid is happy news for him. While we're not talking about any reduction in service to the current-eligible population, it is absolutely the case that some people that under current law go to Medicaid will now go to private insurance instead. For Burris, that's the key point.

I should also say that none of the above means that Burris and friends won't try to cut (they might say reform) the existing Medicaid program. And specific to transfer populations, they may argue that reducing the burden on the program via those transfers should allow them to reduce Medicaid's admin budget. DHS Director John Selig disagrees. But those are political fights that are separate to the expansion debate.

This is probably a good time to mention that the same point about new-plan/old-plan holds for co-pays and cost-sharing. For folks below 100 percent of FPL, the same rules about small co-pays apply as would have under Medicaid expansion. For folks between 100 and 138, co-pays would be the same as what could be imposed on that population on the exchange.

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