More About Edwin Park

Edwin Park

Park is Vice President for Health Policy at the Center on Budget and Policy Priorities, where he focuses on Medicaid, the Children’s Health Insurance Program, and issues related to federal health reform.

Full bio and recent public appearances | Research archive at CBPP.org


House Bill Makes Permanent Medicare Premium Assistance for Low-Income Beneficiaries

March 24, 2015 at 11:24 am

The compromise legislation that House Republican and Democratic leaders unveiled today to permanently fix Medicare’s flawed physician payment formula and extend funding and current policy for the Children’s Health Insurance Program (CHIP) through 2017 has another important feature — it would also make permanent the Qualifying Individuals (QI) program, which helps low-income Medicare beneficiaries pay their premiums and is otherwise slated to expire at the end of March.

QI is one of the Medicare Savings Programs (MSPs) through which Medicaid helps low-income Medicare beneficiaries pay their Medicare premiums and/or other cost-sharing charges.  QI covers the annual Medicare Part B premiums for beneficiaries with incomes between 120 percent and 135 percent of the poverty line (roughly $14,100-$19,100 for singles and $15,900-$21,500 for couples).  The program helps more than half a million near-poor seniors and people with disabilities pay their premiums.

Policymakers periodically need to extend QI — unlike the other MSPs, which are permanent features of Medicaid — and it’s once again scheduled to expire.  In finally making QI permanent, the House legislation would ensure that QI beneficiaries can continue to receive benefits, which are worth about $1,260 in 2015, over the long run.  Moreover, because people enrolled in QI are automatically enrolled in the Medicare drug benefit’s Low-Income Subsidy, which helps low-income beneficiaries with their premiums and cost-sharing for their drug coverage, they’d be assured of continuing to receive that assistance as well.

Senate Budget Chairman’s Plan Would Block-Grant Much of Medicaid, Repeal Medicaid Expansion

March 19, 2015 at 12:28 pm

Like House Budget Committee Chairman Tom Price’s budget plan, Senate Budget Committee Chairman Mike Enzi’s new plan proposes to radically restructure Medicaid by converting much of it into two block grants and cutting federal Medicaid funding by roughly $400 billion over the next decade.  And like the Price plan, it would repeal health reform’s Medicaid expansion.  The combined Medicaid cut would exceed $1.3 trillion over ten years, relative to current law, leaving millions of Americans uninsured or underinsured.

Repealing health reform’s Medicaid expansion means that at least 14 million people would lose their Medicaid coverage or no longer gain coverage in the future, as we explained in our analysis of Chairman Price’s plan.  In addition, the large and growing cut in federal Medicaid funding from the two block grants would almost certainly force states to scale back or eliminate Medicaid coverage for millions of low-income people who now have it.  All told, after also accounting for the plan’s proposed repeal of health reform’s marketplace subsidies, tens of millions of people would likely become uninsured.

Under the plan, the federal government would no longer pay a fixed share of states’ Medicaid costs for children and non-elderly, non-disabled adults, including pregnant women; these beneficiaries account for 78 percent of total enrollment today.  It would also alter federal financing for long-term care services and supports (such as nursing home care for seniors), which account for about a quarter of all Medicaid spending.  Instead, states would apparently get a fixed dollar amount of federal funding for these spending categories in the form of two block grants.  Chairman Enzi’s budget plan doesn’t specify how either block grant would be initially set or how they would be adjusted each year.  (Federal funding for acute care services furnished to seniors and people with disabilities would apparently continue as under current law.)

Federal funding in the two block grants would fall further behind state needs each year, in order to produce the $400 billion in federal savings that the budget assumes.  That’s a cut of nearly 11 percent in federal Medicaid funding over the next decade compared to current law.  And that doesn’t count the loss of the large amount of additional funding that states would receive to expand Medicaid under health reform.

Moreover, the loss of federal funding under the two block grants would be even greater in years when enrollment or per-beneficiary health care costs rose faster than expected, such as during a recession or after the introduction of a new breakthrough health care treatment that improved patients’ health but raised costs.  In addition, the long-term care block grant would likely fail to account for the effects of the aging of the population; over the next several decades, Medicaid spending per beneficiary for seniors will grow faster than in the past because the large baby-boom generation will move from “young old-age” to “old old-age,” when average long-term care costs are considerably higher.  Currently, the federal government and the states share in all of these higher costs; under the Enzi plan, states alone would bear them.

In the face of these sizeable and growing Medicaid funding shortfalls, states would have to contribute more of their own funds or, more likely, use the increased flexibility they would be given under the two block grants to significantly cut eligibility, benefits, and payments to health care providers.  And while the proposed structure wouldn’t directly affect the existing federal financing system for acute care services for seniors and people with disabilities, states would likely have no choice but also to make deep cuts to those parts of Medicaid to compensate for the federal funding cuts they would face under the block grants.  Substantial numbers of low-income Medicaid beneficiaries would thus end up uninsured or underinsured.

Proposed Medicaid Block Grant Would Add Millions to Uninsured and Underinsured

March 17, 2015 at 12:40 pm

Update, March 17:  We’ve updated this post to reflect that the House Budget Committee used the Congressional Budget Office’s January 2015 baseline in preparing its plan rather than CBO’s March 2015 baseline.

House Budget Committee Chairman Tom Price’s budget plan proposes to radically restructure Medicaid by converting it to a block grant and cutting federal funding for it steeply, by $913 billion over the next decade. It would also repeal health reform’s Medicaid expansion. The combined Medicaid cut would reach $1.8 trillion over ten years, relative to current law, adding tens of millions of Americans to the ranks of the uninsured and underinsured.

Repealing health reform’s Medicaid expansion means that at least 14 million people would lose their Medicaid coverage or no longer gain coverage in the future. (That’s the number of people who the Congressional Budget Office [CBO] estimates would eventually gain coverage under the Medicaid expansion, though it could reach 17 million if all states adopt the expansion.) In addition, the large and growing cut in federal Medicaid funding from the block grant would almost certainly force states to sharply scale back or eliminate Medicaid coverage for millions of low-income people who have it today. All told, after accounting for the plan’s proposed repeal of health reform’s marketplace subsidies, tens of millions of people would likely become uninsured under Chairman Price’s plan.

Under the Price plan, the federal government would no longer pay a fixed share of states’ Medicaid costs, starting in 2017. Instead, states would get a fixed dollar amount of federal funding known as “State Flexibility Funds.” (The budget plan doesn’t specify how it would set each state’s block grant amounts initially or adjust them each year.)

  • The block grant funding would fall further behind state needs each year. The annual increase in the overall block grant funding would average about 4.7 percentage points less than Medicaid’s current projected growth rate over the next ten years, which accounts for factors like rising health care costs and the aging of the population. Federal Medicaid and Children’s Health Insurance Program (CHIP) spending in 2025 would be $161 billion — or nearly 34 percent — less than what states would receive under current law, according to the budget plan (see chart).  And the cuts would likely keep growing after 2025.
  • Altogether, the block grant would cut federal Medicaid spending by $913 billion from 2016-2025; a small share of these cuts could come from CHIP, which the Price plan would merge into its new Medicaid block grant. That would cut federal Medicaid and CHIP funding by nearly 24 percent over the next ten years, compared to current law — and that doesn’t count the loss of the large amount of additional funding that states would receive to expand Medicaid under health reform.
  • The loss of federal funding would be greater in years when enrollment or per-beneficiary health care costs rose faster than expected, such as during a recession or after the introduction of a new breakthrough health care technology or treatment that improved patients’ health but raised costs. Currently, the federal government and the states share in those unanticipated costs; under the Price plan, states alone would bear them.

As CBO concluded when analyzing a similar Medicaid block grant proposal from former House Budget Committee Chairman Paul Ryan’s budget plan of three years ago, “the magnitude of the reduction in spending . . . means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might involve reduced eligibility, . . . coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries — all of which would reduce access to care.”

In making these cuts, states would likely use the expansive additional flexibility that the Price plan would give them. For example, the plan would likely let states cap Medicaid enrollment and turn eligible people away from the program; under current law, states must accept all eligible individuals who apply. It also would likely let states drop certain benefits that people with disabilities or other special health problems need.

The Urban Institute estimated that former Chairman Ryan’s similar block grant proposal in 2012 would lead states to drop between 14.3 million and 20.5 million people from Medicaid by the tenth year (outside of the effects of repealing health reform’s Medicaid expansion). That would cause a drop in enrollment of between 25 percent and 35 percent. The Urban Institute also estimated that the block grant likely would have caused cuts in reimbursements to health care providers of more than 30 percent by the tenth year. Chairman Price’s Medicaid block grant proposal likely would mean similarly draconian cuts.

House Republican Op-Ed Admits Benefits of Affordable Care Act

March 4, 2015 at 2:10 pm

What’s striking about the vague health plan that three key House Republicans — Education and Workforce Committee Chairman John Kline, Ways and Means Committee Chairman Paul Ryan, and Energy and Commerce Committee Chairman Fred Upton — outlined yesterday isn’t just the lack of critical details, but their language in describing it.  They imply that their plan will offer certain features that the Affordable Care Act (ACA) doesn’t when, in fact, the ACA already provides these benefits — and, in most cases, much more so than their plan likely would.  This suggests they recognize that many ACA elements are actually quite popular, including:

  • Allowing people to choose from a range of plans that fit their needs and budgets and having insurers compete for their business. The ACA’s federal- and state-based marketplaces do just that.  They allow individuals and families to choose from an array of plans with differing levels of coverage, with multiple insurers participating in virtually every state.  Marketplace subsidy amounts are based on premiums for a benchmark plan, encouraging insurers to compete based on price as well as other factors.
  • Helping people who have to buy coverage on their own to afford it. Under health reform, people with incomes between 100 and 400 percent of the poverty line who lack access to other health coverage can get tax credits to help pay the premiums for marketplace coverage.  People with incomes below 250 percent of poverty also receive help with deductibles and other cost-sharing.  It’s far from clear that Chairmen Kline, Ryan, and Upton would offer comparable subsidies that limit premiums to specified percentages of income for people below 400 percent of poverty, as the ACA does.  And their op-ed is silent on whether they will offer any help with deductibles and cost-sharing.
  • Providing tax credits that are advanceable, refundable, and adjusted for age. That’s exactly how the marketplace tax credits work today.  They go directly to the insurer on behalf of an eligible individual (though people can elect to get the credit instead when they file their taxes).  They are refundable; that is, their value isn’t limited by what people owe in federal income tax.  And they’re adjusted to account for differences in premiums based on age.  Under the ACA, insurers can charge older people no more than three times what they charge younger people; the premium credits ensure that, whatever your age, if you are below 400 percent of poverty, your share of the premium charges cannot exceed specified modest percentages of income.  We are very skeptical that Chairmen Kline, Ryan, and Upton will offer anything comparable.
  • Providing safeguards for consumers. Chairmen Kline, Ryan, and Upton say they would let adult children to stay on their parents’ plan up to age 26 and would prohibit insurers from imposing lifetime limits on coverage.  They also would “protect people with existing conditions” but don’t specify how.  The ACA, however, requires much more in consumer protections and market reforms.  For example, it prohibits insurers in the individual market from denying coverage to people with pre-existing conditions, charging people in poorer health higher premiums than healthy people, charging women more than men, or setting lifetime or annual dollar limits on coverage.  As noted, insurers can’t charge older people more than three times what they charge younger people, and they must set an annual limit on total out-of-pocket costs for covered services.  In addition, they can’t charge cost-sharing for preventive care and can’t have big gaps in their coverage, such as not covering prescription drugs or maternity care (as often occurred in the pre-health-reform individual market).  In contrast, the Kline-Ryan-Upton plan apparently has no standards for benefits and cost-sharing charges, and their op-ed says nothing about limiting insurers’ ability to set annual dollar limits on coverage or charge higher premiums to women and older people.

The Kline-Ryan-Upton plan would likely make coverage less affordable for millions of Americans, particularly those who are older and in poorer-than-average health, thereby increasing the ranks of the uninsured and underinsured.  It wouldn’t come close to achieving the benefits that the ACA provides today.

Another Day, Another Republican Health Non-Plan

March 3, 2015 at 1:59 pm

Three leading House Republicans — Education and Workforce Committee Chairman John Kline, Ways and Means Committee Chairman Paul Ryan, and Energy and Commerce Committee Chairman Fred Upton — say they have a plan in case the Supreme Court rules that health reform subsidies are no longer available to people buying federal marketplace coverage.  Like the recent proposal from three Senate Republicans, this latest “plan” is very vague, but what we know about it strongly suggests that it would make coverage much less affordable, particularly for people who are older or in poorer health.

The three House chairmen say they would allow states to waive various health reform requirements.  They don’t specify which ones, but their proposal likely would allow insurers to return to the pre-health-reform market by:

  • offering plans with large gaps in coverage, such as no prescription drug or maternity coverage;
  • charging older people much higher premiums than younger people;
  • charging deductibles and other cost-sharing without limits; and/or
  • imposing annual dollar limits on benefits.

States also could drop health reform’s individual mandate, which helps keep premiums stable and affordable in the individual market by encouraging a balanced mix of people (younger and healthier people as well as older and sicker ones) to enroll in health coverage.

The chairmen also would allow insurers to sell coverage across state lines, which would likely mean that insurance companies wouldn’t have to comply with consumer protections in most states — only whatever weaker protections exist in the state where the insurer has chosen to be licensed.  Such plans would mainly attract healthy people with low health care costs since they least need strong consumer protections.  That’s exactly why the Congressional Budget Office (CBO) previously found that such an approach would drive up premiums for people with higher-than-average health care costs, forcing some to go without coverage.

Similarly, the chairmen say that small businesses could pool together to purchase coverage.  That’s probably a nod to proposals establishing “Association Health Plans” (AHPs).  Like plans offered across state lines, AHPs are generally exempt from a state’s consumer protections, so they mainly attract businesses whose employees are younger and healthier.  Because employers with older workers and less-healthy people would remain in the regular non-AHP market, they would end up paying much higher premiums, as CBO also has explained.

Finally, the chairmen say they’d provide a new tax credit to buy health insurance.  But they don’t explain how it would compare to the credit provided in the marketplace today, such as by revealing the size of the credit or who would get it.  Nor do they say whether their plan includes financial assistance to help people with deductibles and cost-sharing charges, as health reform does.  They say the tax credit amount would be adjusted for a person’s age, but they don’t say whether the adjustment would fully account for the much higher premiums that older people would have to pay under the plan.

In short, under the Kline-Ryan-Upton plan, many people, especially those aged 50-64 and those in poorer-than-average health, would likely pay much more than under current law, and any subsidies would likely prove highly inadequate over time.  This, in turn, would reverse health reform’s dramatic progress in reducing the ranks of the uninsured and underinsured by (1) forcing millions of people to go without coverage and (2) forcing many others to get by with skimpy coverage or face deductibles and co-pays they can’t afford and, hence, go without needed care.