NCD Letter Regarding Graham-Cassidy Amendment
September 25, 2017
The Honorable Mitch McConnell
Senate Majority Leader
317 Russell Senate Office Building
Washington, DC 20510
The Honorable Chuck Schumer
Senate Minority Leader
322 Hart Senate Office Building
Washington, DC 20510
Dear Majority Leader McConnell and Minority Leader Schumer:
I write on behalf of the National Council on Disability – a non-partisan, independent federal agency that for more than forty years has advised the President, Congress and other federal agencies regarding disability policy matters – to advise caution regarding three aspects of the “Graham-Cassidy amendment” that NCD believes may disproportionately negatively affect people with disabilities. Although it’s important to note that disability does not necessarily equate with poor health, people with disabilities are often more vulnerable than the general population to changes to the healthcare system for reasons we outline below. Therefore, NCD has continuously examined the impact of various healthcare policy changes on people with disabilities, including some of the key provisions of the most recent proposal in the Senate offered as an amendment to H.R. 1628, the “American Health Care Act of 2017” by Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), and Ron Johnson (R-WI). This letter will examine three aspects of the proposed amendment in particular that NCD believes will negatively affect people with disabilities, consistent with our long-offered healthcare policy advice to policymakers.
Pre-existing Conditions
In 1993, NCD identified the exclusion from health insurance of people with pre-existing conditions as perhaps the single biggest impediment to accessing healthcare in the private market for people with disabilities.1 Then, in 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPPA) with strong bipartisan support. HIPPA was a watershed event for people with disabilities who wanted to work because it meant a group health plan could not impose a pre-existing condition exclusion so long as the individual maintained creditable medical coverage for at least 12 months prior to entering the plan and had not experienced a 60-day gap in coverage or more. The Affordable Care Act (ACA) took this one step further and prohibited pre-existing conditions exclusions altogether in the individual as well as the employer market. This provision gave people with disabilities access to coverage who may have previously had to rely on Medicaid or Medicare, giving them an opportunity to work and earn a living knowing they had options for coverage outside of public benefits or employer sponsored health plans that are often not available in entry-level or unskilled work.
While the proposed language maintains the prohibition against insurance companies imposing pre-existing conditions exclusions against consumers in the individual market, this protection is undermined by the ability of states to submit a plan including their own their own definition of essential health benefits, raising caps on out-of-pocket costs, and allowing insurers to vary premiums based on health status. Although states would need to describe how access to “adequate and affordable coverage” would be maintained, this standard is not defined in the text and may prove difficult to enforce. If insurers are allowed to vary their premiums based on health status, experience tells us that people with a wide variety of pre-existing conditions and disabilities will be priced out of obtaining coverage. Further, even if they can afford to pay the higher premium, changes to the essential health benefits standard may mean that the coverage is inadequate to meet their needs.
What impact these changes would have on people with disabilities depends on how states use the flexibility they are given and what standard is used to determine the reliability of assurances that “adequate and affordable coverage” will be maintained under the state plan, what steps states actually take to ensure that people with pre-existing conditions can access coverage, and what enforcement measures the Federal Government is willing to take if a state fails to make adequate and affordable coverage available to all, regardless of pre-existing conditions. For these reasons, although it is impossible to accurately forecast the actual impact these proposed changes might have on people with disabilities, we do know that the elimination of pre-existing conditions exclusions has made it possible for more Americans with disabilities to obtain coverage in the private market, and for that reason, NCD cautions against weakening the existing protections against people with preexisting conditions.
Medicaid Expansion and Subsidies
The proposed amendment effectively ends the Medicaid expansion of ACA and converts money currently allocated for this program into block grants that would be spread amongst the states, both those that expanded Medicaid and those that did not. While the Medicaid expansion group is generally characterized as non-disabled, this is not necessarily the case. The definition of disability under the Americans with Disabilities Act includes many individuals who would not meet the definition of disability required to qualify for traditional Medicaid. In a 2016 report examining the impact of ACA on Americans with disabilities, NCD noted that Medicaid expansion primarily benefitted: “…individuals whose conditions did not meet the severity requirements for pre-ACA disability-based Medicaid as well as those falling within the two-year waiting period before qualifying for disability-based Medicare.”2 Medicaid expansion has not been in place for long, but there is evidence that individuals with chronic illness have benefitted from the expansion.3 As we noted in that same report, access to Medicaid at higher income levels decreases the pressure on people with disabilities to remain in poverty in order to qualify for Medicaid’s comprehensive benefits. People with mental health disabilities who are less likely to self-identify as disabled were likely among the greatest beneficiaries of Medicaid expansion, which is of particular importance as deaths from opioid abuse and suicide reach epidemic proportions. In block-granting the money currently allocated under ACA to the states, this proposal also ends the federal subsidies provided to individuals who earn between 138 and 400 percent of the federal poverty level. Although it is likely that states would use the money in constructive ways, it’s worth noting that because of the subsidies, the proportion of adults with chronic illness who lacked coverage fell by 53% in this income bracket.
Changes to Traditional Medicaid
The proposed amendment also transforms the Medicaid program for traditional beneficiaries of Medicaid, including people with disabilities, through the per capita cap payment reforms that were passed by the House as part of the Better Care Reconciliation Act (BCRA) of 2017. However, the current proposal increases the growth rate to the higher CPI-Medical (CPI-M) growth rate for elderly and disabled enrollment categories beginning in 2024. In 2013, NCD produced a report examining Medicaid block grant and per-capita cap proposals in which we acknowledged that federal health and Social Security costs are on an unsustainable path unless growth is curtailed or tax revenues increased. However, despite the more generous CPI-M growth rate over Consumer Price Index for all Urban Consumers (CPI-U) rate used in the BCRA, cost savings are achieved through per-capita cap programs by allowing the federal per-beneficiary cap to grow at a slower pace than the anticipated growth in per-capita expenditures. Although increasing the flexibility of the states is a goal of this amendment, if the resources do not meet the needs of states’ elderly and disabled citizens, states may be forced to cut benefits and reduce provider payments to make up the shortfall. This would of course impact the quality of life for people who rely on Medicaid for home and community based services in addition to traditional medical services; and deep cuts in services could endanger their lives.
Cuts in provider reimbursement rates would also likely exacerbate the direct care workforce shortage, which is already a national crisis. While NCD has not taken a position for or against applying per-capita caps to controls costs in the Medicaid program, we recognize that the use of this funding strategy raises the specter of widespread programmatic cuts and creates understandable fear and anxiety across the disability community.
Finally, as mentioned previously, one of the purported advantages of using block grants and per capita caps is that it gives states greater flexibility. However, since the imposition of per capita caps is likely to lead to decreases in funding relative to existing and future need, states will actually have less flexibility to create innovative programs as increasingly tight budgets force state policymakers to cut back on services, thus stifling innovation and limiting the ability of state policymakers to design a Medicaid program that meets the needs of their constituents.
While NCD is concerned about the impact of the current proposal on people with disabilities and advises caution, we remain ready to work with Congress to examine and develop policies that control costs while maintaining critical services. For example, we have conducted extensive research on Medicaid managed care and believe that it can create a pathway toward higher quality services and more predictable and even lower costs, but only if service delivery policies are well-designed and effectively implemented and achieve cost savings by improving health outcomes and eliminating inefficiencies without reducing the quality or availability of care. We look forward to working with Congress, the President, and key federal agencies such as Health and Human Services, the Center for Medicaid Services and the Agency for Community Living to develop cost-effective policies that improve the lives of people with disabilities and improve health outcomes for all Americans.
Respectfully,
Benro T. Ogunyipe
Vice Chair
1 National Council on Disability, Sharing the Risk and Ensuring Independence: A Disability Perspective on Access to Health Insurance and Health-Related Services (March 4, 1993) http://www.ncd.gov/publications/1993/March1993#8
2 National Council on Disability, “The Impact of the Affordable Care Act on People with Disabilities: A 2015 Status Report (January 26, 2016) http://www.ncd.gov/publications/2016/impact-affordable-care-act-people-disabilities-2015-status-report at 11
3 Id. at 3.