06.28.2017 / Press Release

Senate Health Bill Now on Hold Full of Cynical “Earmarks” for Many Republican States and likely More to Come

Washington, D.C. – The Senate proposal to repeal the Affordable Care Act (ACA) – now on hold – makes deep cuts into every state Medicaid budget through its per capita cap formula. However, the bill compounds the pain by redistributing Medicaid funding based on complex and targeted formulas. These “quasi-earmarks” create partisan winners and losers through a cynical scheme to impose particularly deep Medicaid cuts on some – but not all – states that spend more than the average in their Medicaid programs for seniors, children, people with disabilities, and low-income adults, according to a review by the policy staff at Families USA.

This structure clearly allocates shrinking Medicaid funds away from states represented by Democrats in the Senate to states with Republican senators. The bill cuts more federal funding above and beyond the cap from states that offer more comprehensive Medicaid benefits and pay health care providers rates more in line with Medicare and private insurance. For example, states like Minnesota, Connecticut and Delaware – states with Democratic Senate delegations – that have high per capita spending could face cuts hundreds of millions deeper than other states. Meanwhile, despite having some of the highest per capita Medicaid spending in the nation, Alaska, North Dakota, South Dakota, Montana and Wyoming will all be exempt from additional cuts beyond the per capita cap as “low population density” states. These states all have Republican Senate delegations, except for Montana, which has one Democratic senator.

Many experts believe that the Republican leadership may spend the July 4th recess developing additional “earmarks” to attract the needed votes.

Following is the statement of Frederick Isasi, executive director of Families USA on the review’s findings:

“This is the worst example of using hyper-technical funding formulas to provide a kind of earmark to specific states to garner support from individual senators. Republican leaders are gaming the system to try to get a political victory at the expense of seniors and people with disabilities. These efforts will affect millions of the neediest and most vulnerable, including mothers, children and seniors, based on their political representation in the Senate.  Families should not be penalized by a piece of legislation developed in secret to meet political aims. We urge senators to drop this plan, start over and develop real solutions for our nation’s families.”