A Trumpcare Update

A few months back, I posted an article about possible changes to the health care system (specifically changes to Medicaid), and the changes to the Affordable Care Act, that had been proposed by President Trump. Many things have changed since that time, including the passage of ACHA by the House of Representatives. This week, it appears that the Senate is prepared to vote on the “Better Care Reconciliation Act of 2017”, which is the Senate’s version of health care reform. Given the fast-changing political climate, it is very possible that by the time you read this, the information will be outdated, but I think it is interesting to follow the possible course of what I believe is the program upon which most drastically effects more people in the United States than any other (Medicare is vitally important as well, and is also affected by this bill, but it is outside of the scope of this article. Medicare is also available to everyone over a certain age, where Medicaid affects almost entirely the poor, elderly and disabled).

The Senate plan would reduce federal spending on Medicaid by approximately 26% by 2026, and the overall plan would result in approximately 22 million less people being insured (about 5 million of which are on Medicaid). Medicaid covers nearly 20% of all Americans, 40% of all children and disabled and over 60% of all nursing home residents. It also pays for almost 50% of all births and long term-care (which includes things like in-home care, assisted living, etc.). The problem with Medicaid to many is that the spending by the federal government is open-ended and based on the number of enrollees in each state. Currently, Medicaid can cover as many people as are eligible, but naturally when more people are covered, it costs more. What the Senate plan will do is place a cap on the amount the federal government will spend, regardless of how many people actually need it. The spending caps would be set at the rate of inflation, which is about half of the rate of the growth of need for Medicaid, which is mostly based on the fact that the overall population is aging. Many of these changes won’t become effective for a number of years, or will be phased in, but in the next ten years the amount of spending on Medicaid will be reduced by $772 billion dollars. The end result is that states will face more pressure to provide health care for less people. The change would force states to drastically change Medicaid qualification rules, which will make planning very difficult for individuals that may or do already require long term care. It’s also likely that states will need to trade quality of care for lower costs.

It is unknown right now what the final changes to the program will be. As someone that is keenly aware of how the aging population is using the program, I know that there are some cases where great planning can put a person in a position to rely on Medicaid to provide for their long-term care, even if at some point it would’ve been possible for them to pay their own way. However, those cases are actually very rare. Most people are shielding such a small amount versus the actual cost of care that these proposed changes are extremely aggressive. There are things that could be done to change qualification rules (and are done all the time) to close “loopholes” or make qualification more selective. Those changes could be done without fundamentally altering the program that could well affect many helpless individuals.