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Axios
4 days ago
- Business
- Axios
How the GOP megabill may roll back the Affordable Care Act
The massive Republican budget bill working its way through Congress has mostly drawn attention for its tax cuts and Medicaid changes. But it would also take steps to significantly roll back coverage under the Affordable Care Act, with echoes of the 2017 repeal-replace debate. Why it matters: The bill that passed the House before Memorial Day includes an overhaul of ACA marketplaces that would result in coverage losses for millions of Americans and savings to help cover the cost of extending President Trump's tax cuts. It comes after a growth spurt that saw ACA marketplace enrollment reach new highs, with more than 24 million people enrolling for 2025, according to KFF. The House's changes would likely reverse that trend, unless the Senate goes in a different direction when it picks up the bill next week. Driving the news: The changes are not as sweeping as the 2017 effort at repealing the law, but many of them erect barriers to enrollment that supporters say are aimed at fighting fraud. Brian Blase, president of Paragon Health Institute and a health official in Trump's first administration, said Republicans are focusing on rolling back Biden-era expansions "that have led to massive fraud and inefficiency." The CBO estimates the ACA marketplace-related provisions would lead to about 3 million more people becoming uninsured. Cynthia Cox, a vice president at KFF, said while the changes "sound very technical" in nature, taken together "the implications are that it will be much harder for people to sign up for ACA marketplace plans." What's inside: The bill would end automatic reenrollment in ACA plans for people getting subsidies, instead requiring them to proactively reenroll and resubmit information on their incomes for verification. It would also prevent enrollees from provisionally receiving ACA subsidies in instances where extra eligibility checks are needed, which can take months. If people wound up making more income than they had estimated for a given year, the bill removes the cap on the amount of ACA subsidies they would have to repay to the government. Some legal immigrants would also be cut off from ACA subsidies, including people granted asylum and those in their five-year waiting period to be eligible for Medicaid. What they're saying: In a letter to Congress, patient groups pointed to the various barriers as "unprecedented and onerous requirements to access health coverage" that would have "a devastating impact on people's ability to access and afford private insurance coverage." The letter was signed by groups including the American Cancer Society Cancer Action Network, American Diabetes Association and American Lung Association. Between the lines: A last-minute addition to the bill would also make a technical but important change that increases government payments to insurers in ACA marketplaces. That would have the effect of reducing the subsidies that help people afford premiums and save the government money, by reducing the benchmark silver premiums that are used to set the subsidy amounts. Democrats are concerned that if Congress also allows enhanced ACA subsidies to expire at the end of this year, the combined effect would be even higher premium increases for enrollees next year. Insurers that already are planning their premium rates for next year say the Republican funding changes are throwing uncertainty into the mix. "Disruption in the individual market could also result in much higher premiums," the trade group AHIP warned in a statement on the bill. The big picture: Blase said changes like ending automatic reenrollment are needed to increase checks that ensure people are not claiming higher subsidies than they're entitled to. "I think what happened during the Biden years led to massive fraud and improper spending, and that needs to be rolled back," he said. Cox said another way to address fraud would be to target shady insurance brokers, rather than enrollees themselves. She estimated that marketplace enrollment could fall by roughly one third from all the changes together.
Yahoo
23-05-2025
- Politics
- Yahoo
Opinion - States should cut the federal cord and end dependency on Washington
In most blue states at least, President Trump's second term is creating a battle over how the states can use federal money. Many Democratic governors are suddenly defending state control and pushing back against Washington's influence. But the reality is that too many states resemble satellites orbiting Washington rather than sovereign governments charting their own course. In 2022, more than half of Louisiana and Alaska's budget came from federal funds. Twenty states receive more than 40 percent of their dollars from Washington. North Dakota is the supposed bright light at just over 22 percent. To regain federalism's footing, states need to reassert more political courage and financial independence from Washington's tentacles. Trump, who found a winning electoral issue on opposing transgender ideology, threatens to pull education funds from states that fail to comply. Trump quickly repositioned the intent of the Title IX law back to its original purpose, calling for only biological females to compete against biological females in athletics. States like Maine strongly oppose the requirement. Rather than reform their reliance on federal dollars, however, states typically respond by suing to keep the federal spigot flowing, reinforcing perpetual dependence over fiscal disentanglement. Some states use federal dollars to mask over budget shortfalls, even using money to indirectly subsidize state tax cuts. Federal aid too often lets states avoid the hard budgeting and governance decisions that should fall to lawmakers. The most obvious example is the Medicaid expansion under the Affordable Care Act, where the federal government sweetened the pot for states by covering 100 and then 90 percent of the cost for able-bodied, working-age, childless adults. It's important to remember that while states were receiving these 90 percent reimbursement rates from the Feds for this population, another group of Americans were being pushed to the back. The disabled, pregnant women, and children — those for whom Medicaid was originally designed — have had to fight for healthcare access as the result of federal interference. Some states even enshrined expansion into their state constitutions while looking the other way when it comes to unsustainable federal spending levels. It remains unclear whether the federal government will make a serious effort to achieve meaningful Medicaid savings — even if it means limiting coverage for able-bodied but nonworking childless adults. Medicaid expansion has become an elaborate money-making endeavor for states to harness more and more from taxpayers with no skin in the game. 'All these tactics let states rake in massive federal dollars without any state cost and reduce the pressure on state policymakers to responsibly govern and weigh tradeoffs between spending and tax policies,' wrote Brian Blase, president of Paragon Health Institute. Although fraud and abuse under expansion is too lengthy to document, a 2019 Pelican Institute report after expansion in Louisiana noted that 1,672 Medicaid recipients had incomes over $100,000, and at least one household had an income higher than then-Gov. John Bel Edwards (D). A 2025 report from the Foundation for Government Accountability reveals how California exploits funding loopholes to cover illegal immigrants under Medicaid, costing federal taxpayers nearly $10 billion in clear violation of federal law. Disaster relief is another example. So much aid comes from the federal government, often 75 percent when an emergency declaration is made, that it can heavily disincentivize states from building their own rainy-day funds. It also reduces the incentive to invest in infrastructure resilience or take proactive steps to mitigate risk. The result is greater dependence on Washington, rather than increased responsibility. After Hurricane Helene, some federal lawmakers tried to deregulate disaster relief, but as North Carolina's John Locke Foundation warns, 'the fiscally unstable federal government cannot be counted on to be a reliable partner in disaster relief efforts.' Ultimately, given Washington's dysfunction and inability to prioritize spending, the political environment provides not just an opportunity to question federal funds, but lower the political temperature by making more decisions at the state and local level. Federalism is more than a dusty concept to admire from afar. It's a set of common-sense principles to restore trust in government and give people real power over their communities and destiny. The alternative is for Americans to continue watching their states orbit as satellites of expanding federal power, letting Washington's dysfunction pull us further away from self-government. Ray Nothstine is a senior writer and editor and a Future of Freedom Fellow at the State Policy Network. He manages and edits American Habits. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
23-05-2025
- Politics
- The Hill
States should cut the federal cord and end dependency on Washington
In most blue states at least, President Trump's second term is creating a battle over how the states can use federal money. Many Democratic governors are suddenly defending state control and pushing back against Washington's influence. But the reality is that too many states resemble satellites orbiting Washington rather than sovereign governments charting their own course. In 2022, more than half of Louisiana and Alaska's budget came from federal funds. Twenty states receive more than 40 percent of their dollars from Washington. North Dakota is the supposed bright light at just over 22 percent. To regain federalism's footing, states need to reassert more political courage and financial independence from Washington's tentacles. Trump, who found a winning electoral issue on opposing transgender ideology, threatens to pull education funds from states that fail to comply. Trump quickly repositioned the intent of the Title IX law back to its original purpose, calling for only biological females to compete against biological females in athletics. States like Maine strongly oppose the requirement. Rather than reform their reliance on federal dollars, however, states typically respond by suing to keep the federal spigot flowing, reinforcing perpetual dependence over fiscal disentanglement. Some states use federal dollars to mask over budget shortfalls, even using money to indirectly subsidize state tax cuts. Federal aid too often lets states avoid the hard budgeting and governance decisions that should fall to lawmakers. The most obvious example is the Medicaid expansion under the Affordable Care Act, where the federal government sweetened the pot for states by covering 100 and then 90 percent of the cost for able-bodied, working-age, childless adults. It's important to remember that while states were receiving these 90 percent reimbursement rates from the Feds for this population, another group of Americans were being pushed to the back. The disabled, pregnant women, and children — those for whom Medicaid was originally designed — have had to fight for healthcare access as the result of federal interference. Some states even enshrined expansion into their state constitutions while looking the other way when it comes to unsustainable federal spending levels. It remains unclear whether the federal government will make a serious effort to achieve meaningful Medicaid savings — even if it means limiting coverage for able-bodied but nonworking childless adults. Medicaid expansion has become an elaborate money-making endeavor for states to harness more and more from taxpayers with no skin in the game. 'All these tactics let states rake in massive federal dollars without any state cost and reduce the pressure on state policymakers to responsibly govern and weigh tradeoffs between spending and tax policies,' wrote Brian Blase, president of Paragon Health Institute. Although fraud and abuse under expansion is too lengthy to document, a 2019 Pelican Institute report after expansion in Louisiana noted that 1,672 Medicaid recipients had incomes over $100,000, and at least one household had an income higher than then-Gov. John Bel Edwards (D). A 2025 report from the Foundation for Government Accountability reveals how California exploits funding loopholes to cover illegal immigrants under Medicaid, costing federal taxpayers nearly $10 billion in clear violation of federal law. Disaster relief is another example. So much aid comes from the federal government, often 75 percent when an emergency declaration is made, that it can heavily disincentivize states from building their own rainy-day funds. It also reduces the incentive to invest in infrastructure resilience or take proactive steps to mitigate risk. The result is greater dependence on Washington, rather than increased responsibility. After Hurricane Helene, some federal lawmakers tried to deregulate disaster relief, but as North Carolina's John Locke Foundation warns, 'the fiscally unstable federal government cannot be counted on to be a reliable partner in disaster relief efforts.' Ultimately, given Washington's dysfunction and inability to prioritize spending, the political environment provides not just an opportunity to question federal funds, but lower the political temperature by making more decisions at the state and local level. Federalism is more than a dusty concept to admire from afar. It's a set of common-sense principles to restore trust in government and give people real power over their communities and destiny. The alternative is for Americans to continue watching their states orbit as satellites of expanding federal power, letting Washington's dysfunction pull us further away from self-government. Ray Nothstine is a senior writer and editor and a Future of Freedom Fellow at the State Policy Network. He manages and edits American Habits.
Axios
26-03-2025
- Business
- Axios
Conservatives push to cut extra Medicaid payments to hospitals
A think tank with close ties to the Trump administration is making the case for wonky changes to state Medicaid payments that could solve a big problem for Republican lawmakers: They could cut federal spending in the name of simply cracking down on waste and abuse within the program. The big picture: State-directed Medicaid payments have grown rapidly, and there's been bipartisan support for reining them in. But slashing or getting rid of the payments would be a big financial hit for providers, and especially hospitals, who vehemently disagree that the payments are wasteful. Driving the news: Paragon Health Institute released a report Wednesday characterizing state-directed payments as "legalized Medicaid money laundering." States can tax providers or use other means to increase their state share of Medicaid funding, which allows the state to draw down additional federal Medicaid dollars. States can then use that extra money to increase payments to providers. "Not only do these programs sidestep the truly needy on Medicaid and favor special interests instead, but all this is financed by growing the federal debt, leading to inflation and higher interest rates," the report says. Zoom in: State-directed payment arrangements approved as of last August are projected to cost more than $110 billion per year, a nearly 60% increase over cost projections from early 2023. A small portion of these arrangements are driving most of the increase, according to independent Medicaid advisers to Congress. What they're saying: "All of this is fits within waste and abuse in the program," Paragon President Brian Blase, who co-authored the report, told Axios. "Congress, looking at $2 trillion budget deficits, needs to make significant reform to the federal-state partnership" in Medicaid. The report advocates for Congress to cap the amount of federal Medicaid funding states can receive, though it acknowledges that such a change is unlikely. The report also recommends other policy changes, like prohibiting states from using provider and insurer taxes to finance Medicaid payments, ending or capping state-directed payments and stopping policy consultants from being paid with Medicaid funds. Between the lines: The Government Accountability Office and independent Medicaid advisers have both said in recent years that state-directed payment arrangements need more oversight. Democratic lawmakers have also advocated changes to provider taxes. The Biden administration last year finalized a rule to increase transparency into state-directed payments. The Paragon report says the rule helped, but that it should still be repealed over fiscal concerns. The other side: Hospitals say patients' access to care could suffer without the supplemental payments. "Let's be clear: provider taxes and state directed payments provide the means to offset the crippling underpayment by Medicaid for critical care that meets the medical needs of so many kids, mothers, disabled, and seniors," Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement to Axios. Taking federal money out of the Medicaid system may ultimately force hospitals to cut back services or staff, affecting beneficiaries' access to care, said Megan Cundari, senior director of federal relations for the American Hospital Association. What we're watching: Blase said his team is having discussions with congressional offices.
Yahoo
16-03-2025
- Health
- Yahoo
Opinion - What to do about $1.1 trillion in improper Medicaid payments
As the 119th Congress seeks to reduce government spending through reconciliation, talk of Medicaid reductions has raised concerns about vulnerable populations losing Medicaid coverage. But simply following the law and paying only for what Medicaid allows would save hundreds of billions of dollars without ending coverage for any of Medicaid's intended recipients. According to official reports, the government issued $543 billion in improper Medicaid payments from 2015 to 2024. But that's only what the government measured. Based on the few years that the government performed full audits, I coauthored a report with Paragon Health Institute President Brian Blase that estimated that the true amount of improper payments is twice that, totaling roughly $1.1 trillion over the last decade. That's a whopping $8,200 per U.S. household. The primary reason for the discrepancy is that the Obama and Biden administrations excluded eligibility checks in their audits of improper payments in Medicaid. But eligibility errors and failures to properly assess eligibility prior to enrollment are the biggest sources of improper payments. Since Medicaid is a means-tested welfare program and includes different federal reimbursement rates based on enrollees' eligibility status, checking eligibility is crucial. In many cases, individuals who are not eligible for the program are enrolled in it, and in other instances, those enrolled are wrongly classified. The federal government reimburses states for between 50 percent and 75 percent of Medicaid costs for their traditional Medicaid enrollees — which includes children, pregnant women, seniors and individuals with disabilities — with lower rates in wealthier states. The Affordable Care Act expanded Medicaid to able-bodied, working-age and generally childless individuals, which crowded out access to care for traditional enrollees. Because expansion enrollees receive a much higher 90 percent federal reimbursement, states have the incentive to wrongly classify traditional enrollees as expansion enrollees. Moreover, hospitals can use presumptive eligibility, which is an expedited Medicaid enrollment process that permits hospitals to essentially enroll people into Medicaid based on only a few questions about income and household size and without verification. People receive temporary Medicaid coverage pending a review. The Foundation for Government Accountability found that in 2018, 70 percent of people deemed eligible by hospitals were eventually determined ineligible or did not complete the application and have their information verified. Measures taken during the COVID-19 pandemic — including increasing federal support of Medicaid so long as states did not update their eligibility requirements or remove ineligible people from the program — led to an estimated 20 million ineligible enrollees on Medicaid by the time President Biden finally declared an end to the public health emergency. Failing to even check for these eligibility errors in state Medicaid audits causes massive underreporting of improper payments. In 2019 and 2020 when the government conducted full audits that included eligibility determinations, the improper payment rates averaged 27 percent. When we apply a 25 percent improper payment rate for all years between 2014 and 2023, we estimate roughly $1.1 trillion in improper Medicaid payments. Much of this is money that should not have been spent if the federal and state governments were following the law. Congress enacted legislation directing the Health and Human Services secretary to push the cost of excessive improper payments back onto states by withholding federal funds for improper payments over three percent. Despite states routinely issuing improper payments many times that level, HHS has never withheld funds under that requirement. To automatically incorporate accountability into improper payment rates, Congress should require CMS to reduce future federal Medicaid reimbursements to high-offender states so those states, which are responsible for managing the programs, bear the cost of their failures instead of federal taxpayers. Moreover, to prevent underreporting of improper payments, federal policymakers should require states to conduct more frequent eligibility redeterminations, improve hospitals' presumptive eligibility enrollment and require full audits of improper payments including eligibility checks. Many changes are necessary to improve Medicaid and protect the integrity of federal taxpayers' spending on it. Following the law and cracking down on improper payments is a common sense first step that could provide hundreds of billions of dollars in Medicaid savings. Rachel Greszler is a visiting fellow in workforce at the Economic Policy Innovation Center and co-author with Brian Blase of the report, 'Medicaid's True Improper Payments Double Those Reported by CMS.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
