CBO update: BCRA cuts Medicaid spending 35% over 20 years

The Senate's Better Care Reconciliation Act would reduce Medicaid spending by 35 percent in 2036 compared to projections under current law, according to an extended estimate from the Congressional Budget Office.

The CBO's previous analysis, which estimated the effects of the bill over the next decade, found Medicaid spending would be 26 percent lower than projections under current law by 2026. In other words, the rate of Medicaid spending growth would be reduced from 5.1 percent under current law to 1.9 percent until 2026 under the BCRA. Spending growth would increase slightly to 3.5 percent thereafter, according to the updated analysis.

The reductions in spending growth under the BCRA stem from several changes to the entitlement program's current structure. The bill would cap per-enrollee payment growth beginning in 2020, start to roll back Medicaid expansion in 2021 and install a per-capita cap system for states, with the option to apply for block grant funding.

"Under this legislation, after the next decade, states would continue to need to arrive at more efficient methods for delivering services (to the extent feasible) and to decide whether to commit more of their own resources, cut payments to healthcare providers and health plans, eliminate optional services, restrict eligibility for enrollment, or adopt some combination of those approaches," the CBO report reads.

The extended projection was requested by Sen. Ron Wyden, D-Ore., ranking member of the Senate Finance Committee, and Sen. Bernie Sanders, I-Vt., ranking member of the Senate Budget Committee. The request for the updated analysis is a nod to how central Medicaid has become to the healthcare reform debate. Democrats are seeking to highlight losses to the Medicaid program, while the current administration wants to reframe discourse as slowed growth in spending that continues to increase. Both President Donald Trump and HHS Secretary Tom Price, MD, have taken to Twitter to discuss Medicaid spending under the bill.

 

 

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