Hoeven Statement on New Draft Health Care Legislation

WASHINGTON – Senator John Hoeven today issued the following statement after Senate Leadership released a new draft health care reform bill:

“As I’ve said all along, our overall goal for health care reform legislation is to provide Americans with access to patient-centered health care and health insurance at an affordable rate. I did not support the Senate’s first draft. Now, I will review the new draft legislation and want to see the CBO score and additional analysis of the legislation. I will reserve judgment until we do so.” 

Hoeven is reviewing provisions, including: 

Medicaid Expansion Funding Replaced by Refundable Tax Credit, Long-Term State Stability Fund 

The objective is to provide low-income individuals with health care coverage either through Medicaid or their own health insurance policy. Through the refundable tax credit and additional funding from the Long-Term State Stability and Innovation Fund, states like North Dakota should be able to fund their Medicaid programs without greater cost than under the current program. For Medicaid expansion eligible individuals that would likely include purchasing health insurance policies with the refundable tax credit covering approximately 60% of the costs. The remaining premium cost, copayments and deductibles would be covered by the Federal Medical Assistance Percentages (FMAP) and funding from the State Innovation Fund. In addition, the states will have more flexibility and less regulation to operate their Medicaid programs. 

Obamacare provided for Medicaid expansion with originally a 100% federal cost share, reduced to 90% over several years. Recognizing that formula would be changed to traditional FMAP at some point, many states did not take the expansion. Now states would have new tools and funding on a sustainable basis, to provide coverage by helping individuals purchase their own health policy.

New Approach Phased In Over Seven Years

It’s important to understand that the transition to the new system occurs over seven years. 

  • In years 1 and 2, the state will continue to receive FMAP and federal Medicaid expansion funding on exactly the same basis as it does now. There is no reduction. In fact, North Dakota will benefit from additional funding through the $50 billion Short-Term Stability Fund, which will help stabilize the insurance market and help prevent continued dramatic increases in premiums.
  • In years 3 through 7, the state gradually transitions to traditional FMAP, but has the benefit of offsetting federal Medicaid funding with the refundable tax credit and funding from the Long-Term State Stability and Innovation Fund. 

Again, the objective is to give states time to adjust while making health care more affordable for everyone, and providing new tools and resources to ensure low-income individuals have coverage.