policy

House Budget Committee
Cannon House Office Building
Independence Ave SE
Washington, DC 20515

Subject: Markup of the Concurrent Resolution on the Budget for Fiscal Year 2025, Thursday, February 13^th, 2025

via e-mail

The Association for Community Affiliated Plans (ACAP) is the national trade association which represents not-for-profit, community-based Safety Net Health Plans. Collectively, ACAP plans serve 30 million enrollees through Medicaid, Medicare, Marketplaces and other public health coverage programs.

We thank the Committee for the opportunity to submit this statement for the record concerning its recent markup of the Concurrent Resolution on the Budget for Fiscal Year 2025.

ACAP is gravely concerned that this budget resolution, if approved, would lead to drastically reduced federal funding for essential health programs, reshape the federal-state partnership upon which Medicaid is built, and undermine efforts to provide consistent, reliable coverage to Americans for whom Medicaid is a vital source of health security—including children, seniors with low incomes, and the million-plus veterans who rely on Medicaid for health coverage.. Such substantial Medicaid cuts would also have serious consequences for the providers and caregivers who deliver care, and the communities where they live and work. We urge leaders in Congress to rethink their approach to spending cuts and assure that they don’t leave people who qualify for Medicaid without access to coverage or care.

Medicaid

Medicaid is an efficient purchaser of health care services and a lifeline for working Americans, critical health care providers such as rural hospitals, and local economies. Medicaid coverage provides security for working Americans to help them stay healthy so they can get, and keep, their jobs.

We ask the Committee, and House Leadership, to ensure that Medicaid continues to provide access to affordable coverage and care for all eligible Americans, taking the following principles into account:

• Maintain the Federal/State Partnership in the Medicaid Program. Reducing the federal matching incentive for the expansion population would cause widespread shocks to the health care system, as well as to state and local economies — and will lead to significant reductions in both the number of insured individuals and access to health care services.
• Maintain Eligibility Criteria Without Additional Requirements Related to Non-Health Activities. Access to health care should not be predicated on participating in other activities such as work requirements or job training. Most non-elderly Medicaid recipients who do not have disabilities are employed, and recent evidence shows definitively that bureaucratic and reporting requirements in community engagement programs drastically reduce access while driving up administrative costs.
• Maintain the State Option for Medicaid Expansion. Medicaid remains a cost-effective way to provide coverage for people who need help the most. Because individuals with low incomes require significant subsidies to afford coverage in other settings, making them eligible for Medicaid has saved federal funds.
• Maintain the Medicaid Program’s Guarantee of Coverage. Without a requirement that all eligible individuals can receive Medicaid coverage, states may resort to enrollment caps or waiting lists, increasing the numbers of uninsured individuals – worsening their financial instability and the severity of chronic illness as health issues go untreated and undetected. States and safety net providers will be burdened with the costs of caring for low-income people without reimbursement.

ACAP has long advocated for changes to improve Medicaid, and we now stand ready to work with Congress to develop solutions that will improve how Medicaid works for all stakeholders.

Marketplace

ACAP believes budget reconciliation should include the extension of the enhanced premium tax credits, which are set to expire in 2025. In the absence of an extension, however, Congress should not seek to reduce these tax credits, which are a core component of maintaining health care affordability for millions of working Americans.

Should these enhanced premium tax credits be allowed to sunset, consumers will be faced with a spike in premiums, forcing many lower-income families to choose between health insurance and other basic needs. On top of that outcome, those losses of coverage will degrade the risk pool and raise premiums for all consumers buying individual market coverage.

If the enhanced premium tax credits were to expire, lower-income consumers would face a double whammy: a significant loss of tax credits and higher premiums at the same time. Without the tax credits, fewer consumers will purchase coverage, and healthy consumers in particular are more likely to opt out. As a result, the risk pool will worsen, and premiums will rise accordingly.

The Congressional Budget Office has predicted that ending the enhanced premium tax credits would cause premiums to rise by 4.3 percent in 2026 and 7.7 percent in 2027, meanwhile, the American public has tasked the President with reducing consumer prices. Should Congress fail to extend the enhanced tax credits, the resultant increased premiums will lead to an estimated 3.7 million consumers becoming uninsured by 2027. As a result, hospitals will see a marked increase in uncompensated care, the cost of which will be passed along in the form of higher costs for consumers with insurance, and insurance premiums will rise accordingly; consumers with chronic conditions will revert to waiting to seek care until their condition lands them in the emergency room, at which point their costs will be higher and outcomes worse; cancer diagnoses will be delayed due to missed screenings.

Further, eliminating the enhanced premium tax credits would exacerbate the difference in tax treatment between individual and employer-sponsored coverage, and move incentives toward keeping consumers tied to their jobs simply because the health insurance is more affordable. This can have negative consequences for our economy because it can prevent entrepreneurs from starting new, innovative small businesses. And even with the enhanced tax credits, the median out-of-pocket costs and premiums for consumers with private, individual market coverage is double that of consumers with ESI.

We urge members of the Budget Committee and of the Congress to resist approving drastic spending reductions that would harm these crucial health care programs and the constituents who rely on them.

Thank you for your consideration.

 

Sincerely,

Margaret A. Murray
Chief Executive Officer
Association for Community Affiliated Plans
1155 15th Street NW
Washington, DC 20005