Is Medicaid Going Away?

Is Medicaid Going Away?

By

Ethan R. Okura & Carroll Dortch

 

There has been a lot of political changes in the federal government over the past year. With a Republican president in office and a Republican majority in Congress, some people are concerned about losing the expansion of health care benefits that the Affordable Care Act (Obamacare) provided for. Recently, one of the most frequent questions that we are asked by our clients is: Will Medicaid go away?

The concern here is that with a Republican-party controlled federal government, health care benefits may be eliminated to help balance the federal budget. As an example, the CHIP (Children’s Health Insurance Program) recently ran out of funding. CHIP is a program that pays for health care for children in low-income and middle-income families. Both the Democratic and Republican parties have historically supported CHIP, which pays healthcare costs for 9 million American children and pregnant mothers. Similar to Medicaid, CHIP is a joint program between federal government funding and States’ budgets. However, the Federal government pays the lion’s share of the costs.

The way the legislation was written, federal funding for CHIP was set to expire on September 30, 2017 unless Congress acted to extend the funding. Because Congress hasn’t passed a bill to extend it yet, the Federal Government won’t be contributing any additional funds to States for CHIP. This has alarmed a lot of people. However, this doesn’t mean that those 9 million children are out of health care now. Most States have enough pre-existing funding from the Federal government to continue their programs through next summer. A few of the States that will be hardest hit—such as California and Arizona—have enough funding to last through the end of 2017. Thankfully, the Senate Finance Committee and the House Energy and Commerce Committee have already passed bills to renew CHIP funding. These bills will have to pass through both the Senate and the House and be signed by the President in order to become law and reinstate the funding for CHIP.

One of the problems with the CHIP funding that Senator Toomey (R-PA) was trying to fix was that the budget allocated for CHIP was far in excess of what is expected to be spent by the various states, and since 2009, Congress has already redirected $42 billion of surplus funds that were originally allocated to CHIP, and spent the money on unrelated programs. This “overfunding” technique has been taken advantage of by Congress to use CHIP as a slush-fund/cookie jar—probably because it’s easy to pass a bill that provides funding for health care to needy children, and maybe harder to actually pass a bill that allocates fund to whatever programs they want to redirect the money for. In short, it’s a deception of the public on what the money will really be used for.

Nevertheless, when all is said and done, I can’t imagine that Congress would fail to renew funding for CHIP soon. The health of America’s children is a huge political issue that can’t be easily ignored or swept under the rug.

So what does all this mean for the Medicaid program? Well, the primary bill that Congress was considering to repeal Obamacare was the Graham-Cassidy Bill. Among other things it proposed to reduce Medicaid funding and coverage, but it didn’t try to do away with Medicaid completely. At this point, it looks like it doesn’t really matter anyway because the fourth and most recent version of the bill didn’t get enough support from some key Republican Senators, and would likely not pass if voted on by the Senate at this point.

It’s impossible to accurately predict what will happen with the potential passing of new laws a few months down the road, let alone next year or several years from now. But what we can look to is history. When passed, new laws are almost never applied retroactively, so current Medicaid recipients are unlikely to lose benefits based on any future changes in the law. Also, Medicaid has been around for over 52 years now. It seems extremely unlikely that after all that time it could ever go away completely.

Obamacare did provide expansions of the Medicaid program to include people who were slightly over the official poverty level in income. However, even if Obamacare were to be repealed and the law were to return to the pre-expansion rules, the Medicaid program would still be available to cover the nursing home costs of our aging clients who are concerned about possibly needing long term care in the future.

This highlights the importance now, more than ever, of getting your estate planning affairs in order—not only to plan for an orderly distribution of your assets in the event of your death, but also to plan ahead to legally protect your home and other assets from a Medicaid lien and from nursing home costs.

 

© OKURA & ASSOCIATES, 2017

Honolulu Office (808) 593-8885

Hilo Office (808) 935-3344

 

Ethan R. Okura received his Doctor of Jurisprudence Degree from Columbia University.

 

Carroll (Cary) D. Dortch received his Doctor of Jurisprudence Degree from the University of New Hampshire School of Law, and clerked for the Honorable Judge David G. Campbell in Arizona.

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