Maryland advocates resist efforts to target Medicaid in federal funding fights

The Baltimore Sun

Things began to unravel for Ramar Robinson about three years ago when he was laid off and hit with a diagnosis of depression and mania. The illnesses would require costly therapy, which he could no longer afford.

So the 26-year-old Baltimore County man wound up on Medicaid — the federal program for low-income families now at the center of the debate over Republican efforts to repeal Obamacare and President Donald J. Trump‘s $4 trillion budget proposal.

“Medicaid really did save my life,” said Robinson, who was able to access regular sessions with a therapist and psychiatrist, put his illness into remission and get back to work. “It is due time for society to know what those services really provide and the lives that are being saved daily.”

Congressional Republicans return to work Monday after the Memorial Day recess facing enormous pressure to make progress on replacing the Affordable Care Act — a years-long campaign promise — but also fissures within the party about how to do so. A leading cause of the internal strife is how to handle proposed cuts to Medicaid.

The 52-year-old program serves some 75 million beneficiaries nationwide, including 1.3 million in Maryland. Deep cuts approved by the House last month have become a key stumbling block for the Senate, where members are hearing criticism from governors in both parties.

The House-approved American Health Care Act would cut $834 billion from Medicaid by 2026, the nonpartisan Congressional Budget Office has estimated. The agency predicted enrollment in the program would fall 14 million by 2026.

Estimating the impact in Maryland is trickier because it is not clear how the state would respond if the measure became law.

The left-leaning Center on Budget and Policy Priorities, which performed a state-by-state analysis, said the legislation would cost Maryland $14 billion in federal funds over a decade. And the state’s nonpartisan Department of Legislative Services estimates a proposed reduction in funding for so-called expanded Medicaid — an Obamacare provision that allowed more people to enroll — would, on its own, mean a $1.27 billion loss for the state in 2018.

Trump’s budget proposal would deepen those reductions by another $600 billion nationwide — leading to an estimated $2 billion annual loss in Maryland, according to the Maryland Center on Economic Policy.

That number, which represents just under 5 percent of the state’s $43.5 billion budget, may explain why Republican Gov. Larry Hogan has been more vocal on the Medicaid cuts than any other provision included in the federal care legislation.

It also partly explains why the legislation is facing skepticism on Capitol Hill, even among some Republicans who support doing away with Obamacare.

“The health bill that passed the House will threaten health care and therefore worsen the lives of hundreds of thousands of Marylanders,” said Benjamin Orr, executive director of the Maryland Center on Economic Policy. “It’s a devastating bill.”

House Republicans and the Trump administration counter that the legislation gives states, which contribute about half the cost of Medicaid, more control to tailor the program to their needs. By doing so, they said, local officials can address inefficiencies inherent in a top-down approach.

“We happen to think, for example, that Medicaid is designed for more of an urban poor population than a rural poor, as predominates in South Carolina,” White House budget chief Mick Mulvaney, a former Palmetto State congressman, said recently. “And we would ask them every single year — would ask … the federal government — [to] give us more control over how this money gets spent. And the federal government always said ‘no.’”

Rep. Andy Harris told The Baltimore Sun he agreed with that assessment. The Baltimore County Republican, a Johns Hopkins-trained anesthesiologist, acknowledged that Maryland would have to find some way to cover the loss of federal funding “if the state does not handle the program efficiently.

“We give the states the option to tailor the program to individual needs in the state,” Harris said. “We think there are efficiencies in the market that could be obtained at the state level, through waivers and through experimentation.”

But just how much efficiency can be squeezed out of the system — and whether that savings would cover the proposed cuts — is an open question. Administrative costs for Medicaid are less than 7 percent, about half the rate frequently cited in private insurance, according to the nonpartisan Kaiser Family Foundation.

The program is more efficient, in part, because it pays doctors and hospitals less than private insurance.

Sen. Chris Van Hollen, a Maryland Democrat, said the argument that efficiencies could cover the proposed cuts is “not just wrong, it’s dead wrong.”

“You cannot cut Medicaid by $1.4 trillion and not have devastating consequences to people’s health care in Maryland,” he said.

Democrats are not alone in that view. Four Republican senators, including Rob Portman of Ohio and Shelley Moore Capito of West Virginia — states that Trump won last November — sent a letter expressing concern that the House legislation “does not provide stability and certainty for individuals and families in Medicaid expansion programs.”

Senate Majority Leader Mitch McConnell has said he is skeptical the Senate could pass the House-passed bill without changes. Republican Sen. Richard Burr of North Carolina told a local television station Thursday that the House bill was “not a good plan” and predicted the chamber could not rewrite it by the end of the year.

Assuming Democrats hold together to oppose any Obamacare repeal bill, Republicans can afford to lose only two of their own members.

The core Medicaid program, signed into law by President Lyndon B. Johnson in 1965, reimburses states for about half the cost of medical coverage. The legislation would change that funding stream, setting a cap per beneficiary. In order to save money, the bill sets the growth rate for those caps below medical inflation — meaning states would bear more of the cost over time.

States could instead opt into a block grant program, meaning they would receive set amounts of federal funding regardless of enrollment. States would have more control over the program, but some advocates warn that might mean reductions in coverage.

And that is what worries Robinson, who relied on Medicaid to overcome a diagnosis that he feels is largely misunderstood.

“No one is addressing the necessity for those services, specifically in regards to … mental health,” said Robinson, who works in online merchandise. “There’s still an incredibly large stigma because the conversation is not taking place.”

The Medicaid expansion allowed people with higher incomes to enroll in the program. For the 32 states that opted into the expansion, including Maryland, the federal government promised to pay a higher share of the cost than regular Medicaid — 90 percent after 2020.

The House measure would snap that reimbursement rate back to core Medicaid levels in 2020 for new beneficiaries.

The legislation puts Hogan in a difficult position. The governor, who did not support Trump and has largely avoided weighing in on his policies, has met five times with Health and Human Services Secretary Tom Price to discuss the issue, a Hogan spokeswoman said.

“Governor Hogan has repeatedly called on Congress to work together to achieve common sense, bipartisan solutions to improve our health care system,” spokeswoman Amelia Chasse said. She said the Hogan administration has worked to ensure “the state’s interests are protected under any federal health care plan, including preserving … Medicaid funding, and preventing Marylanders from losing health care coverage.”

Some Democrats and advocates would like Hogan to be more publicly critical, in part because criticism from a popular GOP governor would provide a measure of political cover to centrist Republicans in the Senate to oppose the legislation, or give them a stronger hand to rework it.

“It’s critical for Larry Hogan to join other Republican governors like Charlie Baker of Massachusetts in calling on Congress not to undermine Medicare and Medicaid,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative. “Lives will be in danger if this happens.”

For Melanie Townsend Diggs, the debate is personal. Diggs left her job with Baltimore County Public Schools in 2006 when she became pregnant. Soon after, her husband unexpectedly lost his job, which had provided her family with health insurance.

The Baltimore woman enrolled in Medicaid so she could get prenatal care, and eventually signed four children up for the program, including one born with health needs.

She credits the program with keeping her family healthy until she was able to return to work in 2009 as a librarian with the Enoch Pratt Free Library.

“I don’t know what I would have done if Medicaid was not available to me when I needed it,” said Diggs, 46.

After her experience, Diggs joined the board of the advocacy group Families USA, which has promoted the Affordable Care Act. She now fears the cuts will leave some people unable to access the program.

“I would like everyone to know — especially those who think that they may never need medical assistance — the importance of availability and access to health care if the time arises,” she said.

john.fritze@baltsun.com

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