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4 ways you probably didn’t know the Republican bill changes Medicaid

The changes would be made in the name of reducing costs and encouraging work, but they would also make it harder for people to receive Medicaid benefits.

Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

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The headlines of the Senate Republican bill's Medicaid overhaul should be familiar by now: It ends the generous federal funding for Obamacare's Medicaid expansion and places a federal spending cap on the program for the first time.

The cumulative impact: a $772 billion spending cut over 10 years, versus current law, and 15 million fewer people enrolled in Medicaid in 2026.

But the Senate plan also changes the program in subtler yet still important ways. The consequences might not be on the same scale as ending the expansion and capping spending, but they would still be felt by many of the 70 million Americans who depend on Medicaid.

The changes would be made in the name of reducing costs and encouraging work, but they would also make it harder for people to receive Medicaid benefits.

Here are four provisions you should know about:

1) Work requirements

The Senate bill codifies the authority for states to institute work requirements for some Medicaid enrollees. The Obama administration resisted GOP-led states' requests to require work or job training as a condition of receiving Medicaid, arguing it conflicted with the program's goals. But Republicans are now taking the opportunity to advance a policy they have long supported.

States would be allowed, under the Senate bill, to require Medicaid enrollees to have a job, look for work, or participate in some kind of job training. There are exceptions: Pregnant women, children, the elderly and disabled, and adults caring for kids younger than 6 years old would be exempted.

But as Dylan Matthews already reviewed, there is good reason to think that work requirements are unnecessary — most Medicaid enrollees who can work already do. So any impact the requirements do have would likely be at the margins and serve to limit people's access to the program's benefits.

2) Retroactive eligibility

The Senate bill also repeals what's known as retroactive eligibility — a wonky but important provision for new Medicaid enrollees.

Under the current program, when people sign up for Medicaid, they can get their medical care from the three previous months covered retroactively. That's an important benefit, as many people don't sign up for Medicaid until they have a medical incident and start racking up bills.

Under the Senate plan, that coverage would be scaled back to the same calendar month that a person enrolled in Medicaid. The new enrollee would be on the hook for any costs accrued before that.

“This could be for some folks very challenging, especially for coverage that’s initiated in a hospitalization,” Ben Sommers, a health economist at Harvard University who has studied Medicaid, told me a few months ago. “Some significant minority of Medicaid eligibles will be directly harmed by that provision.”

3) Presumptive eligibility

Obamacare made it easier for certain health care providers, particularly hospitals, to enroll people in Medicaid. It's called "presumptive eligibility" — if the hospital can presume, based on what you tell them, that you're eligible for Medicaid, they'll enroll you and your coverage starts. At some later date, everything is double-checked to make sure you were eligible.

It smooths the process for people — especially because many poor Americans don't realize they're eligible for Medicaid until they go to the hospital — and protects them from the medical costs they incur while they wait for their official eligibility determination.

The Senate bill would repeal presumptive eligibility, prohibiting hospitals from making those determinations and stopping states from enrolling people in Medicaid expansion on a presumptive basis, as Obamacare had allowed.

"The days when medical debt and uncompensated care were significant problems in the health care system will be back," Tricia Brooks at Georgetown University's Center for Children and Families wrote of the combined effects of repealing retroactive and presumptive eligibility.

4) Eligibility redeterminations

Right now, states are required to recheck a person's Medicaid eligibility once a year. The Republican plan would require that redetermination every six months.

This has a couple of consequences. First, it could more rapidly end the generous federal funding for Obamacare's Medicaid expansion; under the Senate plan, states lose that enhanced funding if a person cycles off the program for more than a month. More frequent eligibility checks are likely to lead to more people cycling on and off of Medicaid.

Second, it risks more disruptions in a person's health coverage and a lapse in coverage if there is a paperwork problem.

"For purposes of care coordination, health plans tend to prefer having people enrolled for longer periods of time as opposed to cycling on and off of coverage," MaryBeth Musumeci at the Kaiser Family Foundation told me.

In addition, she said, "eligible people are at risk of losing coverage at renewals due to misdirected paperwork, etc."

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Kliff’s Notes

With research help from Caitlin Davis

Today's top news

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  • “Georgia OB-GYN Will Lead Centers for Disease Control and Prevention”: “Dr. Brenda Fitzgerald, an obstetrician-gynecologist who has served as the top health official in Georgia for the past six years, has been appointed director of the Centers for Disease Control and Prevention, the Department of Health and Human Services announced Friday. 'Having known Dr. Fitzgerald for many years, I know that she has a deep appreciation and understanding of medicine, public health, policy and leadership — all qualities that will prove vital as she leads the CDC in its work to protect America's health 24/7,' HHS Secretary Tom Price said in a statement.” —Andrea Hsu, NPR

Analysis and longer reads

  • “The Hidden Subsidy That Helps Pay for Health Insurance”: “As Republican senators work to fix their troubled health care bill, there is one giant health insurance subsidy no one is talking about. It is bigger than any offered under the Affordable Care Act — subsidies some Republicans loathe as handouts — and costs the federal government $250 billion in lost tax revenue every year. The beneficiaries: everyone who gets health insurance through a job, including members of Congress.” —Kate Zernike, New York Times
  • “The Smart-Medicine Solution to the Health-Care Crisis”: “Real progress in containing costs and improving care will require transforming the practice of medicine itself — how we diagnose and treat patients and how patients interact with medical professionals. In medical training, private sector R&D, doctor-patient relations and public policy, we need to move much more aggressively into the era of smart medicine, using high-tech tools to tailor more precise and economical care for individual patients.” —Eric Topol, Wall Street Journal
  • “The World Doesn't Mooch Off U.S. Health-Care Research”: “Total U.S. biomedical research spending was only about $158 billion in 2015. Suppose, just for the sake of argument, that Canada, Germany, the U.K. and all the other countries where health care is dramatically cheaper than in the U.S. copied every last bit of U.S. R&D for free and didn’t do any of their own research. Even in that extreme case, they would only be saving $158 billion, which is a much smaller amount than what the rest of the developed world currently spends on health overall. So mooching off of the U.S. can’t explain the big gap between them and the U.S.” —Noah Smith, Bloomberg

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