Senate Health Bill Proposes Big Changes to Medicaid Beyond Repealing and Replacing the ACA

The Better Care Reconciliation Act (BCRA) under consideration in Congress includes provisions that would fundamentally change Medicaid by phasing out extra federal funding for states’ Medicaid expansions and for the first time limiting federal spending on Medicaid through a per enrollee cap on financing or a block grant for certain adults.

While those measures account for most of the bill’s $756 billion reduction in federal Medicaid spending over the next decade, there are other big changes in the bill that would reshape the federal health insurance program that covers 74 million low-income Americans. A new issue brief from the Kaiser Family Foundation highlights several less-discussed Medicaid provisions in the bill, including:

• An option for states to require work as a condition of Medicaid eligibility for the first time in the program’s history. 

• A provision to direct the Health and Human Services Secretary to adjust target per enrollee amounts to bring states closer to national average Medicaid spending. Specifically, the Secretary would adjust a state’s target per enrollee amounts by 0.5% to 2% for states spending 25% or more either above or below the national average per enrollee expenditures beginning in 2020. 

• The cancellation of scheduled disproportionate share hospital (DSH) payment reductions for non-expansion (but not for expansion) states.  

• New limits on states’ ability to use provider taxes to finance their share of Medicaid spending. 

• Changes in eligibility and enrollment processes that would make it more difficult for eligible individuals to obtain and maintain Medicaid coverage.

Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.