Managed care plans decry GOP's proposed Medicaid cuts

Medicaid
The change in the way Medicaid is funded that the Senate GOP is currently considering is "simply an enormous cost shift to the states,” according to 10 managed care insurers. (Getty/juststock)

Some of the country’s largest managed care plans want the Senate to know that they are not happy with the steep Medicaid funding cuts that Republicans are considering.

In a letter (PDF) sent this week to Senate leaders, executives from 10 insurers including Blue Shield of California, Molina Healthcare, CareSource and UPMC said they are concerned about the impact such cuts would have on the 74 million low-income, disabled and elderly Americans who rely on Medicaid—13.5 million of which they cover.

“We respectfully ask you to carefully consider the ramifications and consequences of altering the Medicaid-related provisions of the Affordable Care Act and the underlying financing structure of the Medicaid program so that reforms assure coverage to existing and future eligible enrollees while bending the cost curve through value-based initiatives,” they wrote.

The version of the American Health Care Act passed by the House would roll back Medicaid expansion and replace the program’s current funding structure with a per capita cap arrangement starting in 2020. According to the letter, this would reduce the federal share of Medicaid funding by more than $800 billion over a 10-year period and amount to a 25% shortfall in covering the cost of providing care to Medicaid recipients by 2026.

In addition, one proposal currently being considered by the Senate could cut funding even more, as it would start out with the growth rate for a new cap on Medicaid spending at the same levels as the House bill, but then later drop to a lower growth rate.

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“There are no hidden efficiencies that states can use to address gaps of this magnitude without harming beneficiaries or imposing undue burden to our healthcare system and all U.S. taxpayers,” the letter said, adding, “it is simply an enormous cost shift to the states.”

The letter from the 10 insurers comes on the heels of a similar one sent to Senate leaders this week by a bipartisan group of seven governors, who are also deeply concerned about proposed Medicaid funding cuts, FierceHealthcare has reported.

Both are indicative of the pressure Senate Republicans are facing to resolve critical intraparty disputes about how to overhaul Medicaid as they finalize a bill that will repeal and replace the Affordable Care Act.