Federal Policy Update

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1 Federal Policy Update Ohio Association of Area Agencies on Aging Conference November 15, 2017 Amy Gotwals, Chief, Public Policy & External Affairs

2 Planning and Capacity Bdg.

3 Federal Policy Update: Budget and Funding and Health Care, Oh My!

4 Pres. Trump/Congress 2017 To Do List Finish FY 2017 budget and appropriations Avoid Government Shutdown and/or default o o o o o o o o o o o o Tax reform FY 2018 budgeting and approps Health Care Reform (ACA Repeal/Replace) Ease sequester for Defense spending Debt ceiling legislation Rolling back Obama regulations Senate s Confirmation Hearings (Cabinet, Subcabinet) Medicaid reform Medicare reform Budget process reform Infrastructure spending package Immigration reform

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6 Threats to All Aging Programs Lack of understanding, acceptance among lawmakers, public of how huge this aging of the population is Room to move on crafting good aging policy! Uncertainty about long-term financial stability of key social safety net and social insurance programs BUDGET CUTS REVENUE LOSSES

7 Federal Budget and Appropriations

8 Most of the Federal Budget Goes Toward Defense, Social Security, and Major Health Programs

9 Tale of Two Budget Processes Vision vs. Reality

10 The Vision: The Federal Budget Early Feb: President Releases Budget Request to Congress House and Senate Budget Committees draft Budget Resolutions No force of law Sets big-picture spending targets Can also include larger budget goals, including changes to mandatory programs, revenues, etc. Due by April 15 Bicameral budget resolution is often is not achieved

11 The Reality: NDD Programs are Funded through the Appropriations Process With budget resolution target numbers in hand, Appropriations Committees set 302(a) and 302(b) allocations (subcategories of budget) 12 Appropriations Subcommittees Hold hearings in February/March Bills generally begin to move in the Spring, continue into Summer Deadline is September 30; rarely achieved

12 Where Are We Now? Vision: Trump Administration released two rounds of FY 2018 budget requests Vision: Congress passed a budget resolution, setting up tax cuts through reconciliation Reality: Facing the end of a two-year bipartisan budget agreement, so pressure building for another budget deal Reality: House and Senate still finalizing FY 2018 approps bills

13 Reality: Status of Funding Bills Current CR through December 8 House Labor-HHS bill: Overall spending is $5 billion lower than FY 2017 Rejects many cuts proposed by Administration Flat-funds most OAA and ACL programs Includes $14.2 million boost for OAA III B Supportive Services thanks to a successful Republican floor amendment! Eliminates SHIP Cuts SCSEP, Elder Justice Senate Labor-HHS Bill Flat-funds all OAA/aging programs Rejects House cuts to SHIP, SCSEP, Elder Justice

14 Forecast: Finalizing the Funding Bills Bipartisan deal could come as early as last week in November Appropriators need ~1 month to then finalize omnibus levels Continuing resolution past Dec. 8 presumed, likely into early January Other provisions rolled in? Alexander-Murray ACA stabilization package? Dreamers?

15 The FY 2018 Budget Vision and the Reality for Seniors

16 Vision: What s in the FY 2018 Administration/Congressional Budgets? Tax cuts targeted toward high-income earners and corporations Deep cuts to Non-Defense Discretionary (domestic) programs Deep cuts/reforms to Mandatory Programs targeted at low-income beneficiaries Ambitious assumptions about economic growth necessary to balance budget in 10 years

17 Q: Why Should We Care About Blueprints and Tax Reform? A: Sets Up Two-Step Process

18 Remember this Vision from the FY 2018 Budgets? Step One: Tax breaks targeted toward high-income earners/corporations via FY 2018 Budget Reconciliation Step Two: Deep cuts to Non-Defense Discretionary (domestic) programs Deep cuts/reforms to Mandatory Programs targeted at low-income beneficiaries via FY 2019 Budget Reconciliation

19 Vision Meets Reality: FY 2018 Budget Resolution and Reconciliation Congressional Budget Resolution: $1.5 trillion in tax cuts over 10 years, doesn t have to be paid for (deficit spending); allows Congress to have deeper tax cuts if they offset with cuts to mandatory programs $4.1 trillion in mandatory cuts over 10 years including $473 billion to Medicare, $1.3 trillion to Medicaid $800 billion cut over 10 years to non-defense discretionary (NDD)

20 Reality Achieved Through Reconciliation Current Details on Tax Package Using reconciliation bypasses 60-vote threshold If it s not revenue neutral (it s not) pressure is put on programs $1.5 trillion increased deficits; remaining cost paid for by cuts Per Tax Policy Center analysis of WH/Congressional Republicans tax plan: Top 1% of households get 80% of cuts value Bottom 80% of households get 13% 115 million households earing less than $75K average see ~$200 tax cut/yr.

21 Reality Achieved Through Reconciliation House Tax Bill Moving to floor today Includes elimination of medical expense deduction Senate Tax Bill Deeper cuts to individual rates than House Makes corporate tax rate cut (35% to 20%) permanent by zeroing out the ACA Individual Mandate Saves $338 billion over 10 years 4 million ppl lose health insurance in year 1, 13 million over 10 years

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23 What s Vision for FY 2019 Reconciliation? Cuts to NDD Funding ($800 billion) Cuts to Medicaid ($1.3 trillion) Cuts to Medicare (~$500 billion) Cuts to other mandatory income support programs (SNAP, block grants, SSI, SSDI, etc.) (>$1 trillion)

24 For NDD Alone.. Reality: Under current law, FY 2018 NDD funding is scheduled to fall 16 percent below 2010 levels, adjusted for inflation. Vision: Budget proposals would nearly double that cut by 2027.

25 Health Care Reform and Older Adults

26 Process Snapshot: ACA Repeal/Replace & Medicaid Changes Dec.-Jan.: President Trump/Congress aim to repeal ACA on Day One in office CBO says lead to 32 million uninsured Budgetary process hurdles to straight repeal Major backlash leads to promise to repeal and replace Feb.-March: House begins process to develop repeal/replace proposals Several ideas leaked Developed behind closed doors with little input from stakeholders Clear that there will be major Medicaid reforms outside of ACA repeal/replace March-May: House action on Health Care Introduces AHCA to partially repeal/replace ACA and cap/cut Medicaid CBO says million more uninsured; Medicaid cut by ~$840 billion House tries, fails, tries, narrowly succeeds in passing AHCA Senate promises to fix issues in House-passed AHCA May-July: Senate action on Health Care Developed behind closed doors with little input from stakeholders Clear that there will also be major Medicaid reforms outside of ACA repeal/replace Introduces BCRA to partially repeal/replace ACA and cap/cut Medicaid CBO says million more uninsured; Medicaid cut by ~$722 billion (more later!) Senate tries, fails, tries again Ultimately tries to force through skinny repeal in order to keep process moving Senate promises to fix issues with skinny repeal in conference that would have happened behind closed doors with little input from stakeholders September: Senate parliamentarian rules that September 30 is deadline Sens. Graham/Cassidy introduce last-ditch effort to replace ACA/cut Medicaid Developed behind closed doors with little input from stakeholders Ultimately rejected by handful of Senators

27 Common Themes In House and Senate Health Care Reform Proposals ACA Repeal/Replace Major implications for 65 and older and 55 to 64 Partial ACA Repeal and Replace Roll back ACA taxes to pay for exchanges Increase costs/decrease coverage particularly for low-income, older consumers Eliminates coverage requirements/establishes higher age-rating limits Rolls back Medicaid Expansion in states Rolls back pre-existing conditions protections, lifetime cap and out-of-pocket cost protections Eliminated Prevention and Public Health Fund Hastened Medicare Trust Fund Insolvency

28 Current Status of ACA Administration Actions Cut funding for outreach/enrollment and marketing Cut open enrollment timeframe Stopped paying Cost Sharing Reductions (CSRs) Bipartisan Effort in Senate Two-year deal to fund CSRs Additional flexibility for states No significant cost/coverage implications (CBO) 60+ votes in Senate, House passage uncertain, Administration support fluid Tax Reform Repeal of Individual Mandate?

29 Common Themes In House and Senate Health Care Reform Proposals Medicaid Reforms Major implications for 65 and older and people with disabilities Implement a Per-Capital Cap/Block Grant Structure Fundamentally changes federal/state partnership on Medicaid Year-over-year growth rate insufficient Cuts federal funding to states; shifts costs to states Eliminate Medicaid coverage for 15 million+ over 10 years Compromise efforts insufficient to cover cuts

30 Medicaid Per Capita Caps Shift Costs and Risks to States Current Medicaid Financing System vs. Capped Medicaid Funding (in millions) $100 $120 $120 $100 FEDERAL CAP

31 What Might States Do? Unclear exactly how it would play out, but states could be free to: Cap enrollment Narrow eligibility Open new waiting lists Impose work requirements Charge co-pays

32 Threats to Medicare Budget cuts (directly) Tax cuts (indirectly) Overall state of health care, instability in markets effect on older adults not yet on Medicare? effect on Medicare? Lack of understanding about complexity Premium support? Administrative policy bias toward private plans? Vision of new HHS Secretary Alex Azar?

33 Where Do We Go From Here? What Should Advocates Do Now?

34 Key Aging Advocacy Strategies Reach out to your Members of Congress Site visits! Use social media Engage local media Enlist your local networks advisory councils providers clients and caregivers Recruit new advocates Congressman Rick Larsen (D-WA) delivers meals to constituent. Credit: Larry Vogel, MLT News

35 Your Advocacy To-Do List

36 NEXT STEPS: Short-Term Reach out to your MoCs on FY 2018 OAA & SHIP appropriations. o Borrow from n4a Advocacy Alerts ( but be sure to include LOCAL stories and data so that the request comes alive for the reader o Use n4a tools and resources: o Follow Up: call to discuss your request a few days later with key staffer

37 NEXT STEPS: Short-Term Raise Concerns about Tax Cuts Effects on Deficit, Key Programs o n4a Alert coming soon! o Why are we cutting Medicare and Medicaid now when our nation is aging rapidly? o Can we afford tax cuts given the demographics? o Won t running deficits only put more pressure on Medicare, Social Security and Medicaid in the near future?

38 NEXT STEPS: Short-Term Have a social media strategy How are you engaging with grasstops, grassroots, public and lawmakers?

39 NEXT STEPS: Short-Term Decide on 1-2 concrete ways you will try to build/strengthen MoC relationships Get site visit Get of appropriate staff member Find out who in community knows MoCs

40 Use n4a s Advocacy Tools!

41 Amy Gotwals Chief, Public Policy & External Affairs 1730 Rhode Island Ave., NW Washington, DC

Page 2 of 5 Programs serving older Americans under OAA were largely level funded at FY 2017 amounts in this House Labor-HHS spending plan. Considering

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