BCRA 2.0 – Some (Minor) Changes but End Result is Still Death Blow for Medicaid

Senate Republicans recently released an updated version of their “Better Care Reconciliation Act” (BCRA). As NHeLP’s press statement noted, none of the radical cuts to Medicaid were changed – Medicaid expansion would still end and states would face draconian per capita caps (PCC) that get worse over time. So everything we outlined in our prior BCRA publications remains. BCRA cannot be fixed and should be sent to the trash heap.

So what are the minimal changes from BCRA 1.0 to BCRA 2.0? Let’s do a quick run-through (for more information, see our updated Top 10 Changes to Medicaid under the Senate’s Revised ACA Repeal Bill).

1. PCC Base Year – To determine a state’s target PCC, states pick their best 8 consecutive quarters (BCRA 1.0). If a state expanded Medicaid between October 2015 and December 2016, BCRA 2.0 allows it to pick 4 consecutive quarters to determine an expansion PCC rather than using the PCC for non-expansion adults.
2. Retroactive Coverage – BCRA 1.0 eliminated retroactive eligibility for all Medicaid enrollees. BCRA 2.0 restores it for seniors and enrollees who are blind or disabled.
3. Public Health Emergencies – BCRA 2.0 added a new provision, in part responding to the Zika outbreaks last year. If states have a public health emergency between January 1, 2020 and December 31, 2024 (as declared by the HHS Secretary), they can exempt those expenses from its PCC. But the PCC remains for all other Medicaid expenditures. And this does not compensate states for other unexpected Medicaid expenditures (e.g., new treatments/prescription drugs or an aging Medicaid population). Spending is capped at $5 billion for all 4 years.
4. Home and Community Based Services (HCBS) – BCRA 1.0 included language giving lip service to HCBS without any funding. BCRA 2.0 creates an extremely limited demonstration project for calendar years 2020-2023. States could get some additional federal support for HCBS services. Priority is given to the 15 states with the lowest population density. Total funding is $8 billion, or roughly 4 percent of the $202 billion loss of federal HCBS support to states due to BCRA’s per capita caps. BCRA 2.0 also cuts the enhanced federal match for HCBS services provided through the ACA’s Community First Choice program. CBO estimates the cuts to CFC alone would be $19 billion. In short, the HCBS demonstration in BCRA 2.0 is akin to giving someone a cracker after you’ve taken away their dinner.
5. Block Grants – BCRA 2.0 allows states to include Medicaid expansion enrollees in a block grant. Thus, states have 3 block grant options: 1. all non-elderly non-disabled adults including expansion adults; 2. only expansion adults; 3. only non-elderly, non-disabled non-expansion adults. BCRA 2.0 also adds additional payments to a block grant during a public health emergency similar to the public health emergency funding added to the PCC.
6. Native Americans and Alaska Natives – BCRA 2.0 provides 100 percent reimbursement for any service provided to enrollees who are members of an Indian tribe. Current law provides 100 percent reimbursement to Indian Health Service providers only. One question is whether this provision could undermine Indian Health Service providers who traditionally provide services to these individuals.
7. Disproportionate Share Hospital Funding (DSH) – BCRA 2.0 provides a temporary bump in DSH allotments for some non-expansion states. BCRA 1.0 calculated DSH funding based on Medicaid beneficiaries in each state. BCRA 2.0 would calculate the ration as DSH funding to the number of uninsured rather than Medicaid beneficiaries. This would increase DSH funds to states that did not expand Medicaid, such as Florida, Texas and Georgia. And if a state drops expansion before January 1, 2021, it would count as a “non-expansion state” for the purposes of retaining their DSH allotment (exempting them from future cuts) and the bump. So this change provides an additional financial incentive to drop the expansion.

Overall, BCRA 2.0 made only superficial changes to the Medicaid provisions in BCRA 1.0 and the House’s American Health Care Act. And the changes detrimental to women’s reproductive health also remain. BCRA 2.0 still imparts a death blow to Medicaid by cutting funding up to 36 percent and requiring states to operate within a per capita cap. Call your senators today to urge them to vote “no” on any version of BCRA that destroys Medicaid and repeals the ACA.