Last month, the U.S. House of Representatives passed the American Health Care Act (AHCA), which repeals and replaces portions of the 2010 Affordable Care Act (ACA), commonly known as Obamacare. While much of the media coverage of the new legislation has focused on how the law deals with people who don’t qualify for Medicaid or receive insurance through their employers (and so purchase coverage independently in the marketplace), the AHCA’s most dramatic changes actually concern the Medicaid program. The ACA substantially expanded the program, extending coverage to many low-income Americans who had previously been ineligible; the AHCA attempts to undo much of that expansion.
“[T]he AHCA does a lot of different things to a lot of different parts of the insurance system in the U.S.,” says Emily Johnson, a senior policy and statistical analyst at the Colorado Health Institute, a nonpartisan policy research organization. “But, at heart, it’s essentially a Medicaid rollback.”
The Medicaid issue is of particular importance to the Centennial State, which enthusiastically embraced the program’s expansion under the ACA. According to the Colorado Health Institute, about 400,000 Colorado residents have signed up for Medicaid since 2014 (and another 100,000 or so bought insurance on the exchange, with the help of ACA premium subsidies). Thanks in part to this program, the state’s uninsured rate dropped from 14.3 percent in 2013 to 6.7 percent (as of the end of 2015). In 2017, an estimated 24 percent of Colorado residents will receive their insurance through Medicaid.
The AHCA, as it’s currently written, would make two big changes to Medicaid. First, beginning in 2020, it would eliminate federal funding for anyone in the Medicaid “expansion” population who tries to sign up for the program, or who falls off the program and attempts to re-enroll. This provision, says Johnson, would quickly result in most of the Medicaid expansion population losing access. “One out of every five Medicaid enrollees falls off in any given year,” Johnson says “So when you have 20 percent falling off every year, that compounds pretty quickly. By 2030, 95 percent of people who would have otherwise been on Medicaid under the ACA’s rules would fall off.”
The AHCA also changes the manner in which the federal government funds Medicaid—instead of the federal government covering a portion of each patient’s Medicaid costs (no matter how much that amounts to in a given year), the federal government would instead provide a capped, per-patient allotment to states.
The Colorado Health Institutes estimates that by 2030 about 600,000 fewer Colorado residents would be enrolled in Medicaid under the AHCA, as compared to the ACA. The vast majority of those people would likely be unable to afford private insurance, and thus go uninsured. Rural areas, which enjoyed disproportionate gains under the Medicaid expansions, would be hit particularly hard. Forty-four percent of the residents of Alamosa County are on Medicaid; 42 percent of the residents of Conejos County rely on the program; and in Costilla County, 53 percent of people rely on Medicaid for their health insurance.
A Medicaid rollback would affect Colorado’s economy as well. In an analysis published last year, researchers at the nonpartisan Colorado Health Foundation, an organization that works to improve the health of all Coloradans, found that the expansion added more than 31,000 jobs, increased economic activity by $3.8 billion, and increased average annual household earnings by more than $600. Kyle Legleiter, senior director of policy and advocacy at the Colorado Health Foundation, says that while the precise economic effects of any changes to Medicaid depend largely on the details of those changes, a complete rollback—such as that proposed by the House—would be painful.
“A rollback would have a fairly devastating economic impact on the number of jobs and the size of the state’s economy,” says Legleiter. “And the effects would be especially bad in parts of the state that are struggling—places with large proportions of people living in poverty.”
At present, the fate of the AHCA lies in the hands of the U.S. Senate, where the Medicaid issue has emerged as a flashpoint. Twenty Republican Senators (including Colorado’s Cory Gardner) represent states that chose to expand the program. Sen. Gardner is one of four Republican Senators that sent a letter to Majority Leader Mitch McConnell in March expressing concerns over the AHCA’s proposed changes to Medicaid. And as one of the 13 Senate Republicans tasked with putting together a revision of the AHCA that will not only pass the chamber, but also clear a second vote in the house, Gardner is poised to have an outsized influence on what’s included. (Gardner did not respond to a request for comment for this article.) Senate leaders are seeking a vote before the Fourth of July recess, but so far they haven’t drafted a revised piece of legislation.
In the meantime, researchers and advocates in Colorado say they hope that any changes to Medicaid are handled carefully. “Colorado is at a high watermark in terms of the number of people who have health insurance coverage, and we’re starting to see the benefits of that in terms of how healthy our state is and in measures of people being able to access the healthcare they need,” says Legleiter. “Whatever Congress does, we don’t want to see Colorado go backwards.”