Analysis: Proposed health care law could cut Medicaid funding and enrollment

Proposed health care legislation to replace so-called Obamacare reforms would cut funding for Medicaid and the number of people receiving benefits in Colorado, according to analysis tracking the effects of federal policy in the state.

The American Health Care Act (AHCA) under consideration in Congress would cut funding for Colorado by $14 billion during the first decade of its implementation and likely cause nearly 600,000 Coloradans to lose eligibility for Medicaid by 2030, according to the Colorado Health Institute.

“The bill in Congress would force very tough choices on our state legislators — either push people out of the Medicaid program or cut billions of dollars out of other areas of state government,” said Michele Lueck, president and chief executive of the institute.

The institute, a nonprofit organization that provides health care policy analysis, focused only on proposed changes to Medicaid in the AHCA. Other provisions of the bill could also have effects on coverage levels.

The bill makes two major changes to Medicaid. It limits federal funding for people who joined Medicaid under the expansion authorized by the Affordable Care Act and converts federal funding for Medicaid to a per capita allotment system. Funding under per capita allotments is expected to grow slower than funding under the current system.

Under the ACA, Colorado achieve an uninsured rate of 6.7 percent, less than half the 14.3 percent uninsured rate in 2013. Almost all of the drop in the state uninsured rate was attributed to an expansion in Medicaid under Obamacare.

An estimated 500,000 Coloradans have coverage because of the ACA — about 400,000 through expanded eligibility for Medicaid benefits and another 100,000 through subsidies to buy private insurance through the Connect for Health Colorado online marketplace.

While every Colorado county saw an increase in Medicaid enrollment, metropolitan areas accounted for the largest share of the expansion. Western Slope counties had the highest proportions of residents who received subsidies to buy private insurance.

Colorado experienced a small drop in the number of people insured through their employers, part of a national trend of shrinking job-based coverage.

Even as the ACA expanded health insurance coverage in Colorado, the law didn’t stem rising costs for health care or health insurance in the state. As health insurance carriers suffered losses on the individual market, the number of plans has decreased even as the average price has increased.

CHI built a computer model to conduct its analysis, using historic and projected growth in Medicaid enrollment and spending as well as the provisions outlined in the AHCA.