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Joshua Gillin
By Joshua Gillin June 25, 2017

Does GOP health care include grandfather clause for Medicaid expansion?

Proposed changes to Medicaid shouldn’t worry people currently using the health care program for the very poor, White House adviser Kellyanne Conway said, because their coverage will continue.

Conway and George Stephanopoulos discussed the GOP's health care plans on ABC’s This Week on June 25, 2017. Senate Republicans earlier in the week had released a bill to follow up the House plan passed in May.

Despite a projected $800 billion in cuts to the joint state and federal program — which Conway characterized not as cuts but as "getting Medicaid back to where it was" — current enrollees would not be affected, she said.

"If you are currently in Medicaid, if you became a Medicaid recipient through the Obamacare expansion, you are grandfathered in," Conway said.

We reached out to the White House to try to get more details on Conway’s statement, but did not get a response.

Conway appears to be talking about a provision in the House version of the bill that doesn’t appear in the Senate version. In either scenario, however, experts say current Medicaid enrollees will be in danger of losing funding and benefits.

Aid for Medicaid

First, let’s review the Medicaid expansion and how it’s funded.

As part of its efforts to obtain health coverage for as many people as possible, the Affordable Care Act allowed states to expand Medicaid and help pay for it with more federal dollars. Thirty-one states plus D.C. currently have extended Medicaid benefits to all adults making up to 138 percent of the federal poverty level. The poverty line for a family of four is $24,600 in 2017.

For states with expanded Medicaid, the Affordable Care Act said the federal government would cover 90 percent or more of the cost of newly eligible Medicaid recipients. The money Washington kicks in to cover those patients is called the federal match rate.

The House bill would lower the federal match rate for new Medicaid applicants, back to the pre-Obamacare rate, which depends on the state, but would average about 57 percent by 2020. That would shift more costs of expanded Medicaid to states, and almost assuredly result in drastic changes to state programs.

"In practice, this means tens of billions of dollars cut from the Medicaid expansion, and most states wouldn’t be able to cover that gap, so they’d have to reduce eligibility, benefits or both," said Ben Sommers, a Harvard University health policy and economics professor.

Some states even would mandate changes by law.

Seven "trigger" states — Arkansas, Illinois, Indiana, Michigan, New Hampshire, New Mexico, and Washington — built requirements into their Medicaid expansions to protect them from the higher costs of covering so many more people. Those states would legally have to end or curb the expansion if the federal match rate goes down.

Bottom line, while the House bill would allow for an expanded Medicaid system to continue, GOP lawmakers would put less money into it and allow individual states to change eligibility requirements.

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The left-leaning Center on Budget and Policy Priorities said in February 2017 that about 2.6 million expansion-eligible adults would lose coverage due to these trigger laws.

A grandfather clause in the House bill

The House bill does allow people covered by expanded Medicaid as of Dec. 31, 2019, to continue to qualify for the higher 90 percent federal match rate under Obamacare. The "grandfathered expansion enrollees" would have to maintain near-continuous coverage, with no breaks of more than a month, in order to get the higher rate.

That’s not as simple as it sounds.

Continuous coverage can be hard for Medicaid recipients to maintain. Medicaid patients have to continuously provide proof of income, and if a patient goes over the income limit, they lose coverage. This is a concept known as churning.

Joan Alker, a public policy professor and executive director of the Center for Children and Families at Georgetown University, said that even if the bill grandfathers in those people at Obamacare funding levels, there’s no guarantee they’ll be able to keep their Medicaid benefits.

"After a few years ... it is estimated that those people will mostly all have churned off, effectively ending that protection," Alker said.

The nonpartisan Congressional Budget Office detailed what would happen in a March analysis of the House plan.

The CBO concluded "that fewer than one-third of those enrolled as of December 31, 2019, would have maintained continuous eligibility two years later." If the bill became law, the higher federal match rate would still apply to less than 5 percent of newly eligible enrollees by 2024, the CBO estimated.

That would be translate to about 550,000 of the roughly 11 million enrollees who now qualify for the enhanced federal matching under Medicaid expansion.

"Even under the ACA, Medicaid is income sensitive and it is typical for people other than the elderly and people with disabilities to cycle on and off," said Sara Rosenbaum, a George Washington University health law and policy professor. "Under neither the House nor Senate bill are current expansion beneficiaries guaranteed any coverage duration."

The Senate bill, meanwhile, continues to fund Medicaid expansion at the same rates until 2020. After that, the federal contribution shrinks to 85 percent in 2021, 80 percent in 2022 and 75 percent in 2023. In 2024, the federal reimbursement rate drops to the current average of around 57 percent. For states to maintain the Medicaid expansion as is, states would have to raise spending by $43 billion in 2024 alone, according to the Center on Budget and Policy Priorities.

Our ruling

Conway said, "If you became a Medicaid recipient through the Obamacare expansion, you are grandfathered in."

The GOP health care bill that passed the House, along with the "discussion draft" circulated in the Senate, make changes to Medicaid for people who acquired health care coverage through Obamacare.

The House proposal includes a grandfather clause that allows people covered by expanded Medicaid as of Dec. 31, 2019, to continue to qualify for a 90 percent federal match rate. But the "grandfathered expansion enrollees" would have to maintain near-continuous coverage in order to get the higher rate. Experts say that is extremely difficult because of changes in income or because of changes states could choose to make.

The Senate plan, which remains just a draft, continues the Medicaid expansion program largely as is until 2020, before beginning to reduce federal funding for all enrollees. That means either states will have to pick up a larger share of the cost or make changes to the program.

In either scenario, changes are likely. It's just a matter of when and how.

We rate Conway’s statement Mostly False.

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Mostly False
"If you became a Medicaid recipient through the Obamacare expansion, you are grandfathered in."
in an appearance on ABC's 'This Week'
Sunday, June 25, 2017

Our Sources

ABCNews.com, "Kellyanne Conway on Senate health bill: 'These are not cuts to Medicaid'," June 25, 2017

HealthAffairs.org, "Medicaid/Marketplace ‘Churning’ State-By-State," March 12, 2014

New England Journal of Medicine, "Disentangling the ACA’s Coverage Effects — Lessons for Policymakers," Oct. 27, 2016

PolitiFact, "Medicaid expansion drove health insurance coverage under health law, Rand Paul says," Jan. 15, 2017

Center on Budget and Policy Priorities, "House Republican Proposals to Radically Overhaul Medicaid Would Shift Costs, Risks to States," Feb. 24, 2017

HealthAffairs.org, "The American Health Care Act And Medicaid: Changing A Half-Century Federal-State Partnership," March 10, 2017

Congressional Budget Office, American Health Care Act cost estimate, March 13, 2017

Center on Budget and Policy Priorities, "Updated House ACA Repeal Bill Deepens Damaging Medicaid Cuts for Low-Income Individuals and Families," March 21, 2017

Kaiser Family Foundation, "Data Note: Three Findings about Access to Care and Health Outcomes in Medicaid," March 23, 2017

CNN, "House Republicans pass bill to replace and repeal Obamacare," May 4, 2017

PolitiFact, "Would the Republican health care bill take away anyone’s Medicaid?," May 9, 2017

PolitiFact, "Trump-O-Meter: Make no cuts to Medicaid," May 24, 2017

PolitiFact, "The Senate health care bill: What’s in it and what to watch for in the CBO report," June 22, 2017

New York Times, "Senate Health Care Bill Includes Deep Cuts to Medicaid," June 22, 2017

The Atlantic, "The Senate Puts Medicaid on the Chopping Block," June 22, 2017

The Federalist, "Here’s What’s Inside Senate Republicans’ Health Care Bill," June 23, 2017

Center on Budget and Policy Priorities, "Senate Bill Would Effectively Eliminate Medicaid Expansion by Shifting Hundreds of Billions in Expansion Costs to States," June 23, 2017

PolitiFact, "What's in the Senate health care bill? Here are five key provisions," June 25, 2017

Congress.gov, HR 1628, accessed June 25, 2017

U.S. Department of Health and Human Services, Poverty guidelines, accessed June 25, 2017

Kaiser Family Foundation, "Status of State Action on the Medicaid Expansion Decision," accessed June 25, 2017

Kaiser Family Foundation, "Medicaid Expansion Enrollment," accessed June 25, 2017

Interview with Sara Rosenbaum, George Washington University health law and policy professor, June 25, 2017

Interview with Ben Sommers, Harvard University health policy and economics professor, June 25, 2017

Interview with Joan Alker, Georgetown University public policy professor and executive director of the Center for Children and Families, June 25, 2017

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