Claire Li PO ’19
As the GOP vows to repeal the Affordable Care Act (ACA), also known as Obamacare, uncertainty prevails around the future of the U.S healthcare system. As data indicates, in 2016, 70.6 million were covered by the free low-income medicare plan, Medicaid, the expansion of which was made possible through the ACA. In California alone, 13.5 million benefit from the plan under which the federal and state government pay whatever costs are incurred for care that is covered by the program. However, a recent leak on the details of the Republican replacement bill suggests that it could fundamentally reverse the nature of Medicaid and put a burden on the patients, especially the poor ones.
One of the major takeaways from the leaked bill is that the Republicans plan to institute a kind of per-capita Medicaid spending cap and possibly put an end to to participants’ open-ended entitlement to Medicare. In other words, patients under the new version of Medicaid would be subject to a set amount of budget available for medical reimbursements and have to self-finance what is beyond the limit. According to the leaked bill, the plan is likely start in 2020, and would grant states with more flexibility to decide who are eligible, what to require of the participants, and what types of care to cover. The Republican lawmakers argue that the restructure of Medicaid would help the program be fiscally sustainable because it prevents the federal government from overspending on financing the insurance.
Despite strong support from the Republicans, the proposal to dramatically change Medicaid has received a number of concerns. One of the major concerns is that, because states are going to face a tightened budget constraint, they would have to exclude certain healthcare services from the insurance to balance the costs. What could be at risk in particular is the condition of those with complex health needs and dependence on expensive drugs. Some worry that if states are going to cover the high costs of certain patients, they would either have to limit the patient’s access to drugs or to make compromise on the health care of others. It is questionable whether any of the options would lead to a preferable outcome for the patient community.
Another big concern comes from the pharmaceutical and medical device industry. Medicare developers point out that, because of the spending cap, it would be increasingly difficult for the program to purchase advanced and breakthrough medical services. The perceived drop in demand of the services could discourage companies from investing in technological research and medicine development. In fact, the problem of financing advanced drugs is already faced by the current Medicaid program that struggles to limit access to the expensive, yet highly effective, Hepatitis C drug. It is therefore reasonable for many to worry that the new plan would worsen the situation by further decreasing purchasing power of advanced drugs and services.
It is almost clear that the state governments would face a more tightened budget on healthcare services and that the poor could have a harder time getting insured. Yet, the good thing is that the state government would receive more flexibility in designing the program on its own and, presumably, make it more adaptable to local needs. Here in California, it will be worth following how the government strives to maintain the high coverage under the Medicaid plan once the new program is launched.