This week, Congress continues its work to craft budget reconciliation legislation that will implement the FY25 budget resolution passed in April, which required $880 billion in spending reductions to come from the Energy & Commerce Committee’s areas of healthcare, energy, environmental, and communications policy. But what does this mean for our rare disease community? Should we be concerned?
New to Medicaid – Kaiser Family Foundation has compiled a helpful overview
What is in the draft reconciliation legislation?
As expected, the draft contains significant changes to the Medicaid program. Overall, the Congressional Budget Office estimates that the changes will reduce federal spending by $715 billion over ten years and cause 8.6 million people to lose Medicaid. If you consider the policies relevant to those who purchase insurance on the marketplaces, an estimated 13.7 million people will lose healthcare coverage if Congress passes the draft as it stands now.
While the estimated coverage losses are severe, it is worth acknowledging that the draft did not contain policies that would have resulted in even greater losses by lowering the percentage of costs that the federal government pays or changing funding to a set amount per person, rather than the current system of covering a percentage of all costs. Advocacy WORKS! Congress has heard from so many of you through personal testimonies, action alerts, and grassroots campaigns like #IAmMedicaid Campaign, that it scaled back plans. We appreciate our champions in Congress listening to our stories, but there are still a number of concerning changes proposed.
Here are a few highlights of what is included in the draft.
- Work Reporting Requirements: Called ‘community engagement requirements’ in the draft, the proposal implements a requirement for adults aged 19 to 64 to complete 80 hours of work or community service to maintain Medicaid eligibility. There are exemptions in the text for what they deem ‘medically frail’ and for caregivers of disabled individuals. Unfortunately, from previous experiences, we know that an exemption isn’t sufficient protection if it still requires vulnerable individuals to navigate a complex process to prove they qualify for an exemption, sometimes as often as monthly, but not less than twice per year. For disabled individuals and their caregivers who already battle with our complex healthcare and social services programs, and for the physicians and healthcare workers who would inevitably be pulled into supporting their case for an exemption, work reporting requirements will result in significant harm.
- NOTE: “Community engagement requirements” and “work reporting requirements” are the same thing. Members of Congress and the media are using these terms interchangeably.
- Lower Federal Funding for Some States: Some states provide healthcare coverage for undocumented individuals. The draft includes a provision that will reduce the percentage of Medicaid costs the federal government pays if a state provides healthcare to undocumented immigrants. Another way the draft bill lowers Medicaid funding is to restrict state’s use of a tax, often called the provider tax, that can supplement Medicaid budgets and increase federal contributions. The bill would freeze current tax rates and place restrictions on how it can be used moving forward. These changes will result in significant reductions in Medicaid funding in some states and force states to make impossible decisions about scaling back eligibility, removing optional benefits, and reducing the availability of waivers like those used by the rare disease community to receive home and community-based services.
- Rolling Back Rules: The draft repeals certain regulations that were enacted during the Biden administration that would have streamlined enrollment and eligibility verification and enabled more people to get the coverage they are eligible for. Rolling back that rule saves money by lowering the number of people that will successfully enroll in or keep their Medicaid coverage. It also adds more administrative burden and cost to states, on top of the significant new requirements for states to design a system that verifies work requirements.
The proposed cuts will decrease the availability of home and community-based services waivers and could eliminate important programs such as Katie Beckett waivers, resulting in people losing their healthcare coverage due to complicated work reporting requirements.
Congress has signaled through the reconciliation process, as well as years of bi-partisan legislation, that the rare disease community is a priority for its members. The draft does include the language from the Accelerating Kids Access to Care Act, requiring the creation of a streamlined enrollment process for out-of-state providers, in addition to language clarifying the orphan drug exclusion under the drug price negotiation program, and pharmacy benefit managers (PBM) reform.
What’s next?
Today, the Energy & Commerce Committee and two others will ‘markup’ their sections of the budget reconciliation legislation offering amendments, or changes, to the draft. At the end of the markup, the Committee will vote to advance the legislation to be considered by the full House of Representatives. House leadership has stated they want to vote on the full budget reconciliation legislation before Memorial Day. If that occurs successfully, the process moves to the Senate.
While we appreciate Congress’s recognition of the complexities involved in rare disease therapy development and the need for robust incentives, we must also ensure that our patient community maintains access to essential healthcare and services. Saving and improving lives requires pairing innovation with access. The proposed cuts to the Medicaid program represent catastrophic harms to the rare disease community that would outweigh any benefits within the legislation.
Collectively, the proposed changes to Medicaid will decrease funding to states, increase administrative costs, and result in rare disease patients and families losing coverage and benefits.
Read our statement delivered earlier today to the Energy & Commerce Committee
What can you do? Tell Congress why Medicaid is important to you and our community.
