American Health Care Act Could Alter Medicaid Significantly

Last week, GOP lawmakers introduced legislation to repeal and replace the Affordable Care Act (ACA). The long-awaited American Health Care Act (AHCA) would make significant changes to the healthcare industry that lawmakers believe would benefit the healthcare system. These changes would particularly affect Medicaid enrollees, according to the Commonwealth Fund.

Under the AHCA, the current level of federal funding for Medicaid expansion states would be kept through 2019. After 2019, states would receive federal funding for already enrolled beneficiaries, but would receive a lower level of funding for new beneficiaries.

Additionally, federal funding would be provided based on enrollment, costs, and medical inflation, rather than current measures.

Currently, there are approximately 11 million individuals enrolled in expanded Medicaid programs, but data from the 2016 Commonwealth Fund Biennial Health Insurance Survey indicates that millions of beneficiaries could lose coverage under the AHCA as it stands now.

Individuals insured by Medicaid, similar to those with private insurance, may move in and out of coverage due to changing jobs, seasonal work, getting a raise, or getting married. These life-changing events have an impact on health coverage, and may result in a coverage gap.

When enhanced funding is changed in 2020, individuals whose incomes even temporarily increase above the designated federal poverty level would not be eligible for coverage. These individuals may not be able to re-enroll in Medicaid due to funding changes, according to the study.

Under the bill, those who lose coverage would not be able to regain coverage due to a new provision that would prohibit enrollment if there was a gap of more than 1 month, the Commonwealth Fund reported.

The AHCA could especially impact seasonal workers, such as farmers, who earn a substantial portion of their income during certain months. These workers would likely lose coverage during working seasons, and be unable to reenroll when their income plummets.

Approximately 31 million adults experienced a coverage gap in 2016, with 7.6 million losing Medicaid insurance. Among individuals who lost Medicaid coverage, 3.4 million lost it within the previous year, and 73% lost it within the past 2 years, according to the survey.

When asked about the reason behind coverage loss, 48% of participants indicated their age or income had changed, 15% said they did not reenroll during the necessary period, 8% said they had moved, and 19% indicated alternate reasons.

These findings suggest a significant portion of Medicaid enrollees may not be able to receive coverage under the AHCA, according to the Commonwealth Fund.

Due to the numerous players involved in the ever-changing healthcare industry, reforming the insurance system has been notoriously challenging for legislators. Since insurance status largely depends on work status, income, and age, insurance coverage can be inconsistent. New health laws should take that into account to ensure that individuals have access to affordable coverage when needed.

As is, changes under the ACHA may lead to significant changes in Medicaid, especially in expansion states. While these changes would likely drive down spending, millions of Medicaid enrollees could lose coverage, the study concluded.