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Insurance Companies Concerned About The Future Of Medicaid Under GOP Plan


Changes to Medicaid are at the heart of the draft health care bill Senate Republicans unveiled this past week. Medicaid funds health care for nearly 1 in 5 Americans, people with low incomes, people with disabilities and those in nursing homes or receiving long-term care. It also covers 40 percent of American children.

Just before the bill was made public, 10 insurance executives who provide Medicaid plans wrote to Senate leadership to express concern about cuts to the program. One of them was John Baackes. Baackes runs LA Care Health Plan in California. And he says the conversation about the new bill hasn't focused enough on the proposed changes to Medicaid.

JOHN BAACKES: Most of the attention in the last few weeks has been on the individual markets and whether or not pre-existing conditions are covered. And that's very important to the 12 million people in the exchanges. But there's 74 million people on Medicaid, and this bill is essentially pulling the rug out from under that population.

GARCIA-NAVARRO: You signed onto this letter before the Senate bill came out. Now that you've seen it, what are your concerns?

BAACKES: Well, our concerns, unfortunately, are that it was as bad as we thought it could be because it didn't vary that much from the bill that the House passed. And the main issue is we are fundamentally in both bills changing the structure of Medicaid from the way it's operated for the last 52 years.

Originally, this was talked about as repeal-and-replace legislation. And it's going way beyond repeal and replace of the Affordable Care Act because it does affect all 74 million Medicaid beneficiaries, not just those people who gained access because of the Affordable Care Act because, in the original construct of Medicaid, it was to be a shared expense between the states and the federal government.

And under this proposal, what they're saying is, we're no longer going to figure out what it costs and then share it. We're going to cap the amount we're going to contribute, regardless of what the actual cost is. And good luck.

GARCIA-NAVARRO: And how do you think that will affect what you and the states will be able to do for children, so many people who are ill?

BAACKES: Well, if you look at what happens when there are economic downturns, and states have trouble meeting a particular budget year, they will start to cut back on benefits. Or they may cut back on categories of people that they would otherwise cover. Or they will reduce the amount of money that is available to pay the providers.

And that's where I think, given the extent of what the damage would be 10 years out, is what would happen - is we would have to reduce the amount of money we offer providers. And then, if we have doctors dropping out of the plan because they simply can no longer afford to cover this population, people are going to do what they've always done, which is begin to turn to emergency rooms.

GARCIA-NAVARRO: How much of a voice has the insurance industry had in putting together this legislation?

BAACKES: Zip (laughter). Certainly, there have been no hearings where we could go and offer testimony or evidence to that effect. And even privately, through our own individual lobbying efforts or through trade associations, there have been no major forums by which you could offer this, which, for those of us that are observers of this - we're saying, well, is there really any interest in that, or is it just about reducing the amount of money being spent, regardless of the consequences? And if it's the latter, that's a tragedy. And that's what I'm afraid we're seeing.

GARCIA-NAVARRO: John Baackes is the CEO of LA Care Health Plan in California. Thank you so very much.

BAACKES: Thank you very much for this opportunity. Transcript provided by NPR, Copyright NPR.