The fate of the Senate repeal-and-replace bill may depend on whether Seema Verma, director of the Centers for Medicare and Medicaid Services, can convince moderate Republicans that her Medicaid "wraparound" idea can work. As CMS has described it, the idea is to use other funds in the bill to help low-income people get private insurance if they lose Medicaid coverage.
Senate Republicans are consulting with the Congressional Budget Office on it to see if the math would work — but we're getting some serious skepticism from outside experts. "The short answer is, no," says Chris Sloan of the consulting firm Avalere.
Why? On the surface, here's how the math looks:
- Medicaid savings: $756 billion over 10 years (per latest CBO score)
- State stabilization fund: $182 billion over 10 years
- New funding that might be added: $200 billion over 10 years
The bottom line: Even if all of that money went directly to people who lost Medicaid coverage — which is unlikely, since it's really there to help stabilize private insurance markets with lots of unhealthy customers — it wouldn't make up for the reduced Medicaid spending. "This is just basic arithmetic," says Larry Levitt of the Kaiser Family Foundation.
The tax credits are also supposed to help, and CBO projects spending of $295 billion on those. But remember that those are intended to help all customers, not just people who lost Medicaid coverage.
Yes, but: Much of this depends on whether CBO's projections of coverage losses are right. As Avik Roy of Forbes points out, CBO assumes that 15 million fewer people will be covered next year. If the loss of the ACA's individual mandate doesn't really have that big of an impact, "the stabilization funds have a much more powerful effect," he says.