Working to find actionable solutions to the nation's key challenges.

BPC’s Hoagland and Hayes: Innovation Can Address Medicaid Spending While Preserving Access, Care

Tuesday, May 23, 2017

Washington, D.C., The following is a statement by BPC Senior Vice President Bill Hoagland and BPC Director of Health Policy Katherine Hayes on President Trump’s Fiscal Year 2018 budget proposal:

“The Trump administration’s budget proposal will reduce federal funding for state Medicaid programs by more than $600 billion, an amount that the administration’s budget assumes would be in addition to the $839 billion Medicaid spending cut included in the American Health Care Act (AHCA). Based on recent Congressional Budget Office projections relating to the AHCA, we know that Medicaid funding reductions of that magnitude are likely to result in the loss of health insurance coverage for at least 9 million (and possibly as many as 14 million) people who rely on Medicaid. To address cost growth in federal health care entitlement programs, including Medicare and Medicaid, BPC’s work has instead focused on reforming health care payment and delivery to improve the spread and scale of value-based care models. Policies that provide flexibility to providers to move toward patient-centered care have the potential to improve quality and lower Medicaid costs, without a widespread loss of coverage or reduced access to medical care. These patient-centered care models foster the adoption of financial risk and quality measurement to protect patient safety. 

Finding an appropriate balance between expenditures and services to this vulnerable population remains a challenge for elected officials both at the federal and state level.

“The administration’s budget would also mandate that each state choose between a per capita cap on federal Medicaid funding for their state or a conversion of the state’s Medicaid program to a block grant. The proposal would tie annual increases in those caps and block grant amounts to growth in inflation. While BPC has not taken a position on per capita caps and block grants, tying block grants and per capita caps to unreasonable assumptions of health care cost growth, when combined with other significant Medicaid cuts, will reduce of the availability of Medicaid long-term services and supports (LTSS), particularly for patients who receive home-based care. Instead, BPC has recommended policies to improve integration of LTSS and care coordination for individuals who are eligible for both Medicare and Medicaid, while also recommending the preservation of health care coverage and safety net programs for vulnerable populations.

“BPC believes changes to the federal-state run Medicaid program are needed to control budget costs, but we also believe expenditures should be targeted to those with the highest need. Finding an appropriate balance between expenditures and services to this vulnerable population remains a challenge for elected officials both at the federal and state level.”

KEYWORDS: 115TH CONGRESS, AMERICAN HEALTH CARE ACT, BILL HOAGLAND, FY 2018, KATHERINE HAYES, MEDICAID, MEDICARE, PRESIDENT DONALD TRUMP