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Medicaid cuts in Senate health care bill worry veterans

April Donahower

June 29, 2017

Updated: November 20, 2023

medicaid GOP health care bill senate veterans

There are nearly 22 million veterans in the U.S. But less than half get their health care through the Department of Veterans Affairs. Veterans who rely on other types of health care coverage, like Medicaid, as well as major veterans’ service organizations are voicing concerns about the GOP health care bill currently making its way through the Senate.

In particular, they worry that deep cuts to Medicaid would leave hundreds of thousands of low-income vets uninsured, potentially overloading the already strained VA system and putting veterans with mental health concerns at further risk.

The Current State of Medicaid

Medicaid is a public health insurance program largely for low-income people, though some middle-class disabled and elderly people also qualify. States and the federal government share the costs of the program, with the federal government paying 50-75 percent of Medicaid costs for most eligible groups, according to the New York Times.

The Affordable Care Act (ACA, or Obamacare) gave states the option of expanding Medicaid to adults with income up to 138 percent of the poverty level, which would be $16,643 for an individual this year. Thirty-one states opted to expand the program.

Medicaid and the GOP Health Care Plan

Both the House and Senate bills would fundamentally change the way the federal government pays its share of Medicaid costs, setting a per-person limit on spending. The bills would also effectively end the Medicaid expansion implemented by the ACA.

If the bills are passed, federal Medicaid spending would be severely reduced over time, with Senate Republicans proposing cuts of $880 billion over 10 years. The nonpartisan Congressional Budget Office (CBO) estimates that enrollment would drop significantly because it would become harder to qualify for the program and states would have to cut certain benefits to make up for the decrease in federal spending.

Veterans Using Medicaid

Medicaid currently covers about 1.75 million veterans – that’s 1 in 10 of the total veteran population. And veterans use it (rather than VA health care) for a variety of reasons. Some of these reasons include:

  • Distance – some veterans’ local VA is hours away from home (especially in rural areas) and/or they lack transportation options;
  • Wait times – some want to avoid VA’s notoriously long wait times for appointments;
  • Discharge status — some are ineligible for VA care because of their discharge status; or,
  • Additional care needs – some need care that their VA doesn’t offer, like obstetrics (childbirth care)

About half of Medicaid-enrolled veterans are aged 18-64 and are thus ineligible for Medicare. Forty percent of these working-age veterans have no other source of health coverage, according to a study by the Center for American Progress.

That means approximately 459,500 veterans would lose Medicaid coverage by 2026 if the Senate bill is passed in its current form. That’s an even larger number than the 441,300 vets who would lose coverage under the House health care bill.

Concerns for Veterans Losing Coverage

In addition to the reasons listed above (i.e. distance, wait times, etc.) veterans’ advocates have raised concerns about what would happen if veterans enrolled in Medicaid lost their coverage.

The end of Medicaid expansion. The proposed GOP health plan would phase out the extra federal money made available for Medicaid through the Affordable Care Act (ACA) in 31 states. However, recent studies show that veterans greatly benefitted from the expansion. A study from the Urban Institute says that the number of uninsured non-elderly veterans dropped by 40 percent – from 913,000 in 2013 to 552,000 in 2015 – due to Medicaid expansion and the availability tax credits under the ACA.

VA Overload. Veterans’ service organizations (VSOs) have expressed worries that the Veterans Affairs system could be overloaded if veterans currently not using VA health care lose Medicaid coverage. The Department, say the VSOs, hasn’t been able to handle its current workload of patients, let alone an influx of potentially hundreds of thousands of new ones.

VA Secretary David Shulkin told Congress that he expects many more veterans to turn to the VA if the Senate bill becomes law, ABC reported. He declined to estimate the number of veterans affected until the legislative process “runs its course.”

Mental health and substance abuse treatment. Medicaid is the single largest source of funding for mental health and substance abuse treatment in the United States. And many veterans with severe mental health or substance abuse issues also have low or no incomes or are homeless. Some do not qualify for VA care because they were given other-than-honorable discharges for misconduct resulting from those very issues.

Even veterans who don’t lose their Medicaid coverage completely could lose mental health or substance abuse coverage. Under the proposed Senate bill, states could choose to waive the current requirement that insurance companies cover mental health and substance abuse treatment as “essential health benefits.” Though the House and Senate bills both set aside $15 billion for maternity care, mental health, and substance abuse treatment, the Congressional Budget Office found that the fund would not offset the effects of state waivers of mental health and substance abuse care.

Assisted living. The GOP health bill would also eliminate the federal match for the Community First Choice Option under Medicaid, a program which allows low-income veterans with serious non-service-connected disabilities to move from nursing homes back into their communities.

About the Author

Bio photo of April Donahower

April joined Chisholm Chisholm & Kilpatrick in August of 2016 as an Associate Attorney. She currently serves as the Appellate Supervisor in our Veterans Law practice. April’s practice focuses on representing disabled veterans before the Court of Appeals for Veterans Claims.

See more about April