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Health Talk: What the AHCA Could Mean for Medicaid

March 21, 2017

A lot is happening quickly in the health care world and we at CSH want to keep you up to speed on how it impacts the people you serve, your residents, your programs and your communities.  The American Health Care Act or AHCA was introduced by U.S. Speaker of the House Paul Ryan on March 6[1] and has already moved at a rapid pace through key Congressional Committees.   We will track its progress and keep you up to date on the changes and consider the likely impact on Supportive Housing, and our efforts around ending homelessness.

Our Health Talk Blog analysis will focus on Medicaid because that is the health benefit that most people in supportive housing are eligible for and utilize.  The conversation around the individual market is not as relevant to our work, so be sure when you are reading coverage of AHCA to distinguish between the conversations about the individual markets or the Medicaid Expansion.  That being said, the changes to the individual market are concerning for their potential negative impact on the working poor in our country and their ability to maintain health care coverage.

Today’s blog will briefly outline what facets of this complicated discussion we believe are most relevant to supportive housing providers and their residents and then we will consider them in depth in future blog posts.   It’s important to remember that the bill currently before Congress will go through many changes before it becomes law.  For now, we are considering only the broad ideas that are proposed because the details are almost certain to change.

What happens to the Medicaid Expansion?
The AHCA proposes that the Medicaid expansion end in 2020.  The Congressional Budget Office (CBO) estimates that this will eliminate coverage for 5 million people next year and 14 million would lose coverage by 2026.   Those who have gained health coverage would find it more challenging to manage their health care needs without coverage. But Members of the House Freedom Caucus are stating they won’t support the bill unless the expansion ends in 2018[2].  That would end coverage even sooner and challenge states that have already developed their budgets for 2018.  Overwhelmingly those proposed budgets assume that the Medicaid expansion is in place. Either way, ensuring that low-income persons have access to coverage makes an enormous difference in our efforts to bring supportive housing to scale and prevent and end homelessness.

Enrollment Protections
One facet of the Affordable Care Act (ACA) that supportive housing providers likely noticed is the streamlined enrollment[3].  Streamlined enrollment brought the benefits process into the 21st Century by moving away from  paper and in person appointments, and allowing people to sign up on line. Under ACA, states had guidelines for how to engage in that process. What these processes meant for vulnerable people is that they had fewer appointments to keep, less paperwork to manage and likely had fewer coverage gaps.  Coverage gaps are times when a person is actually eligible, but has not proven they are eligible to the right authorities (so they don’t receive the benefit). Analysis is ongoing regarding how the AHCA will impact these protections but it is likely the states will have the ability to require people to prove eligibility more frequently and more people who cannot keep up will fall through the cracks.

Block Granting to States
The AHCA proposes to remove protections and resources that ensure that people who qualify for services receive them.   If Medicaid becomes a block grant, those protections are lost and states will only be able to offer coverage and services that the state budget can afford to fund. All analyses of the bill indicate that the amount of federal funds states receive will decrease significantly over time.  The Congressional Budget Office estimates the federal government will send $880 billion dollars less to the states over 10 years.[4]  As currently structured, Medicaid funding is shared by state and federal governments and funding can grow, based upon either more people qualifying for Medicaid or the growth of health care costs in that state.  Currently, wait lists are not allowed and people are entitled to health care. The burden for funding that care is shared between the states and the federal government.  Persons eligible have access to care because of this flexible funding structure. Under the AHCA, states will get a set amount from the federal government and then have to figure out how to manage with that amount of funding.  Since 49 of 50 states have balanced budget requirements, states will have to come up with strategies very quickly to save a lot of money.

What do states do when they have to save a lot of money?
Based on CBO estimates, one key takeaway is that states will receive a lot less funding to provide health care to people. So states will have to find ways to save money.   States have historically used three strategies to save money in their Medicaid budgets:

  • Pay Providers less
  • Cover fewer people
  • Cover fewer services

None of these strategies bodes well for people living in supportive housing or assisting them to improve their health while controlling health care costs.   In the upcoming weeks, we will look at each of these issues in greater depth and examine their impact on vulnerable people, the systems that serve them, and especially supportive housing residents and providers.


[1] http://www.vox.com/obamacare/2017/3/6/14836586/obamacare-repeal-replace-american-health-care-act-full-text

[2] https://www.washingtonpost.com/powerpost/obamacare-revision-clears-first-hurdle-in-house-committee-early-thursday/2017/03/09/579586b4-04c2-11e7-b9fa-ed727b644a0b_story.html?utm_term=.1800141aa3fe

[3] http://www.commonwealthfund.org/publications/issue-briefs/2016/mar/medicaid-enrollment-marketplaces

[4] https://www.cbo.gov/publication/52486

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Health Talk: What the AHCA Could Mean for Medicaid



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