Illustration: Natalie Peeples/Axios
Some key Senate Republicans are expressing concern about a proposal to lower the federal share of spending on Medicaid expansion, saying it could trigger state budget challenges and coverage losses.
Why it matters: The proposal to lower the federal share of costs known as the Federal Medical Assistance Percentage has been touted by House Republicans as a way to help pay for tax cuts in the reconciliation bill but faces longer odds in the Senate.
What they're saying: "We're an expansion state.… We voted for it on the ballot, which is important, it's not even like it's a legislative deal," Sen. Josh Hawley told Axios.
- "I would want to hear if that's going to result in benefit cuts to Missourians. If it is, then I wouldn't support that."
- Nine states have "trigger" laws that would automatically eliminate Medicaid expansion if the FMAP drops below the current 90%. That would end Medicaid coverage for over 3 million people.
- Sen. Thom Tillis noted that his state of North Carolina is one of those.
- "You don't want to put 600,000 people in the state out of an option that they've opted into," he said, adding that he'd leave the door open to lowering the FMAP "over time."
The other side: House Energy and Commerce Chair Brett Guthrie has repeatedly touted the proposal, arguing that it is unfair that the program has a higher reimbursement percentage for able-bodied, working-age adults than for disabled people or children in traditional Medicaid.
- The conservative Paragon Health Institute has also backed the idea.
Between the lines: In the Senate, though, Republicans are hearing from their state leaders that the move could blow a hole in their budgets.
- "I've talked to my state folks about that. That would have a big impact on our state's budget," Sen. Shelley Moore Capito told Axios, while noting she is "trying to stay open to all ideas right now."
- "What state folks will tell you is if you take it from 90/10 down to whatever, 80/20, it's like whoa," Hawley said. "In Missouri we have a balanced budget amendment.… We're going to have to cut something."
- Asked if he was hearing from his state leaders on the issue, Hawley replied, "Oh yes, oh, believe me."
The bottom line: It's unclear how much Medicaid savings lawmakers will ultimately need to find. There could be pressure to look at the FMAP if the savings target is higher.
- President Trump has said he does not want to touch Medicaid other than "fraud," though it's unclear how much he will stick to that pledge.
- "The president said clearly, I was in the Cabinet room, we can't harm beneficiaries," Tillis said, pointing to the expansion enrollees in his state. "Well, you can't have a policy that affects 600,000 people and not harm beneficiaries."
