NCD Letter to Congress regarding the proposed America's Health Care Act
March 20, 2017
The Honorable Paul Ryan
Speaker of the House
United States House of Representatives
H-232, The Capitol
Washington, DC 20515
The Honorable Mitch McConnell
Majority Leader
United States Senate
317 Russell Senate Office Building
Washington, DC 20510
Dear Speaker Ryan and Senator McConnell:
I write on behalf of the National Council on Disability (NCD) to express the sense of the Council with respect to the recently proposed American Health Care Act (AHCA). NCD is a non-partisan, independent federal agency with a mandate to advise the President, Congress and other federal agencies regarding policies that affect the lives of Americans with disabilities, including the probable impact of proposed changes in healthcare policy on people with disabilities who are disproportionately impacted by such policies. The Council is comprised of congressional and presidential appointees who bring a variety of political perspectives to the work of the Council. In spite of the at times rigorous debates we have about the recommended direction of disability policy, the Council is united in our focus on the needs of the disability community, especially regarding its access to the critical healthcare and long-term supports currently paid for by the Medicaid program.
In recent years, NCD has met with state Medicaid directors, health and long-term care service providers, and people with disabilities and their families who utilize Medicaid services at forums held across the country, and as a result made a number of recommendations regarding reform of Medicaid and other entitlement programs to Congress incorporating these diverse perspectives with an eye toward the programs’ long-term sustainability. While our most recent work has focused on Medicaid and the implementation of the Affordable Care Act, our work in health care policy spans decades.
In a 1993 report, NCD identified the exclusion of people with pre-existing conditions as perhaps the single biggest impediment to accessing healthcare in the private market for people with disabilities.[[1]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn1) We noted that while the Americans with Disabilities Act (ADA) had opened doors to community inclusion and civic engagement, people with disabilities were still hampered in their ability to engage in employment because they were unable to access private health insurance. In 1996, the bipartisan Health Insurance Portability and Accountability Act (HIPAA) was passed, giving employees an opportunity to change jobs after acquiring a health condition or disability without worrying that they would be excluded from coverage at a new job. People transitioning from Medicaid to employment were able to get coverage as well. ACA continued this trajectory and prohibited insurers from excluding people with pre-existing conditions from health coverage or charging them more based on their conditions.
NCD is glad that the popular pre-existing condition provision is retained in the proposed AHCA. We are concerned, however, that allowing insurers to charge individuals who experienced a lapse in coverage a 30% surcharge will fall harder on people with disabilities or chronic conditions who had experienced a lapse in coverage while healthier individuals will be able to continue to go without coverage an avoid the penalty. This may drive up the cost of private insurance for everyone as younger, healthier individuals forego insurance. Finally, AHCA proposes to offer reduced tax credits for older adults who are twice as likely to have disabilities as younger adults, which may put insurance out of reach for a disproportionate number of disabled Americans.[[2]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn2)
NCD is pleased that the designation of “essential health benefits” in the private individual insurance market is retained in AHCA. This is important for people with disabilities who historically faced arbitrary limitations on the types of treatment and therapy they could receive. However, it is disappointing that the “essential health benefits,” such as the provision of mental health and addiction services, will no longer be required in the Medicaid expansion plans. While we understand the aim of providing greater flexibility to states in administering Medicaid, we believe it is vital that these same “essential health benefits” be required in Medicaid expansion plans rather than permitted to be removed from them as proposed.
Medicaid Expansion
One of the key goals of AHCA is to roll back the expansion of Medicaid to individuals who do not meet traditional criteria for Medicaid eligibility. The expansion population is often framed as able-bodied adults at or below 138% of the federal poverty level.[[3]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn3) While these individuals may not meet the narrow definition of “disability” applied by the Social Security Administration used to determine Medicaid eligibility for individuals outside the expansion population, many in the expansion category meet the definition of disability under the ADA. In NCD’s 2016 report examining the impact of the ACA on Americans with disabilities, NCD noted that Medicaid expansion primarily benefitted: “…individuals whose conditions did not meet the severity requirements for pre-ACA disability-based Medicaid as well as those falling within the two-year waiting period before qualifying for disability-based Medicare.”[[4]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn4) Medicaid expansion has not been in place for long, but there is evidence that individuals with chronic illness have benefitted from the expansion. Accordingly, NCD found that “… the ability to access Medicaid at higher income levels decreased the pressure for people with disabilities to remain impoverished to qualify for Medicaid’s comprehensive benefits.”[[5]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn5) Finally, people with mental health disabilities who are less likely to self-identify as disabled were likely among the greatest beneficiaries of Medicaid expansion, which is of particular importance as deaths from opioid abuse and suicide reach epidemic proportions.[[6]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn6)
It remains unclear whether the Medicaid expansion took anything away from people with disabilities who qualified for Medicaid prior to expansion. Almost 600,000 people are currently on waiting lists for home and community-based services (HCBS). These people are waiting for critical services that will allow them to live more safely, independently and productively in their communities and ease the burden on unpaid caregivers who would then be able to contribute more to the economy. The wait lists have ballooned in recent years, but it is unclear whether the enhanced federal match offered to entice states to expand Medicaid adversely impacted the numbers and if so, to what extent. The reality is that HCBS wait-lists have long been a problem and have consistently been growing for decades. The Community First Choice Option that was a part of ACA and is not included in the proposed legislation held some promise of alleviating the wait lists, although only a handful of states opted to utilize this provision so it is not clear how much impact it would have had. However, NCD would like to see home and community-based services included as an integral part of Medicaid services. People should not have to wait years and often experience tremendous hardship before they are able to access these vital services.
Changes to Medicaid
NCD recognizes that fiscal realities are driving the need for taking a hard look at reforming government spending. The 9.8 million people who qualified for Medicaid benefits in 2010 on the basis of disability, prior to Medicaid expansion, accounted for 45 percent of all nonelderly children and adults with substantial disabilities in the nation.[[7]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn7) This also means that no one has a bigger stake in the long-term sustainability of Medicaid than people with disabilities. NCD’s 2013 report examining Medicaid block grant and per-capita cap proposals notes that, “[t]otal U.S. government debt grew from $5.7 trillion in January 2001 to $16.1 trillion in September 2012…” the report also notes that, “…federal health and Social Security costs will increase from 10 percent to 16 percent of GDP over the next 25 years. “Clearly,” the report acknowledged, “…unless the growth in health care costs and Social Security benefits is curtailed, either federal tax revenues will have to be raised to unprecedented levels or the nation’s ever-expanding debt burden will become economically unsustainable.“[[8]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn8)
People with disabilities often depend on Medicaid not only for vital health insurance, but also for home and community-based services that make it possible to live in the community, to pursue an education, and ultimately to work. These services are absolutely essential, but expensive. Consequently, people with disabilities constitute about one quarter of all Medicaid beneficiaries but account for almost two-thirds of spending. As disproportionate consumers of Medicaid dollars, people with disabilities stand to be disproportionately impacted by changes in Medicaid, especially cuts in spending. As refinements are made to AHCA’s text and in the regulatory process, NCD urges Congress to draw upon the expertise of NCD to identify needed changes and assist in refinements.
The recent CBO report found that the changes proposed in AHCA were likely to reduce the federal budget deficit by $337 billion dollars over a ten-year period. Some of the cost savings is achieved by the rollback of Medicaid expansion, but a significant savings is achieved through the implementation of per-capita caps. NCD examined both Medicaid block grant and per-capita caps in our 2013 report and found that federal savings came at a cost to the states:
[t]he primary aim of imposing a per capita cap is to achieve significant federal savings. This objective is usually accomplished by allowing the federal per-beneficiary cap to grow at a slower pace than the anticipated growth in per capita expenditures. Consequently, a state is forced to make up the difference with its own dollars if it is unable to achieve offsetting cost reductions—a challenging proposition given Medicaid’s low administrative costs and the reduction in provider payments and benefits that have occurred in many state programs over the past four years.[[9]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn9)
NCD’s report also expressed concern about the ability of per capita caps to keep pace with demographic changes as the baby boom generation ages increases in program costs due to breakthrough advances in technology, the availability of new and costly medications, or unanticipated epidemics. Economic fluctuations also increase utilization of safety net programs, including Medicaid. NCD is concerned that per capita caps will not keep pace with need in times of economic uncertainty, and that states will reduce services for people with disabilities as budgets tighten and demands on social services increase. [[10]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn10)
Since AHCA’s per capita cap proposal is likely to lead to decreases in funding relative to need, states will actually have less flexibility to create innovative programs as increasingly tight budgets force state policymakers to trim services to the bare minimum. Accordingly, flexibility will actually be reduced as states are forced to cut services. This will stifle innovation and limit the flexibility state policymakers have to design a Medicaid program that meets the needs of their constituents. Furthermore, existing Medicaid policy deliberately limits flexibility in certain instances that ensure that federal money is expended to the maximum benefit of people with disabilities. For example Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services for children under 21 years of age. Under current Medicaid law, states are required to cover any service if it is needed “to correct or ameliorate defects and physical and mental illnesses and conditions.”[[11]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_edn11) Personal care assistance services, for example, must be made available to children as part of a state’s EPSDT coverage even if such services are not made available to qualified adults under the state’s Medicaid plan. Under the proposed per-capita cap funding model, states may face a difficult choice between meeting these obligations and having enough money left over to fund any innovations to respond to the particular needs of others within the state’s population.
NCD applauds the herculean undertaking of policymakers attempting to resolve the tension between budgetary realities and the urgent needs of Americans who, whether disabled or not, continue to struggle with increasing healthcare costs and real challenges to the availability of quality healthcare. After nearly 40 years of offering policymakers advice on the needs of people with disabilities, NCD is well aware of how difficult and contentious these issues can be. While some of the broader issues regarding the federal budget are beyond NCD’s scope, we nonetheless take seriously our responsibility to advise the President, Congress, and other federal agencies regarding policies, programs, practices, and procedures that affect people with disabilities within the context of the existing fiscal realities. NCD understands that AHCA has been offered as but one piece of what is likely to be a multi-step health care reform process; however, NCD’s examination of AHCA raises serious concerns for the disability community.
We welcome the opportunity to talk at greater length with you or your staff about these issues, and work through the concerns in search of reasonable solutions that do not overlook the fiscal realities facing the country but yet still do right by the health care and long-term care needs of Americans with disabilities.
Respectfully,
Clyde E. Terry
Chair
CC: The Honorable Lamar Alexander
The Honorable Orrin Hatch
The Honorable Tom Price
The Honorable Seema Verma
The Honorable Charles Schumer
The Honorable Nancy Pelosi
[[1]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref1)National Council on Disability, Sharing the Risk and Ensuring Independence: A Disability Perspective on Access to Health Insurance and Health-Related Services (March 4, 1993) http://www.ncd.gov/publications/1993/March1993#8
[[2]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref2) https://www.cdc.gov/ncbddd/disabilityandhealth/documents/disability-tipsheet_phpa_1.pdf
[[3]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref3) National Council on Disability, “The Impact of the Affordable Care Act on People with Disabilities: A 2015 Status Report (January 26, 2016) http://www.ncd.gov/publications/2016/impact-affordable-care-act-people-disabilities-2015-status-report at 48
[[4]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref4) Id at 11.
[[5]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref5) Id at 5.
[[6]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref6) Id at 21.
[[7]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref7) Id at 5.
[[8]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref8) National Council on Disability, “A Medicaid Block Grant Program: Implications for People with Disabilities” (May 22, 2013) http://www.ncd.gov/sites/default/files/NCD_BlockGrant_ReportApr10FINAL508_0.pdf at 8.
[[9]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref9) Id at 21.
[[10]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref10) Id at
[[11]](https://ncd.gov/publications/2017/ncd-letter-congress-AHCA#_ednref11) 42 U.S.C. § 1396d(r)(5).