Feb 25, 2017

Warning to governors: Big coverage losses under GOP health plan

Caitlin Owens, author of Vitals

Cliff Owen / AP

Hundreds of thousands of people in a typical state would lose coverage under a standard Republican Obamacare repeal and replacement plan, and the state would lose anywhere between 65 and 80 percent of its federal health care funding, according to a presentation governors were given at a meeting in Washington Saturday.

Governors from both parties were presented with the findings during a National Governors Association closed-door health care meeting. The analyses, obtained by Axios, were presented by Avalere Health and McKinsey & Co. Department of Health and Human Services Secretary Tom Price also spoke to the group.

The impact would vary by state, but in a sample state that expanded Medicaid, it's estimated that:

  • The state would lose $635 million in federal funding, a 65 percent decrease.
  • 110,000 current enrollees would no longer be able to afford a plan.
  • 20,000 currently uninsured people would buy a plan with the new tax credit provided by the GOP plan.
  • Additionally, 115,000 low-income people may lose Medicaid coverage, with no affordable alternative on the individual market.
  • A per capita cap — which would limit funding for each person in the program — would reduce federal spending by 24 percent over five years, requiring the state to spend $6.2 billion to close the gap.

In a sample non-expansion state, it's estimated that:

  • The state would lose $885 million in federal funding, an 80 percent decrease.
  • 130,000 current enrollees would no longer be able to afford a plan.
  • 10,000 currently uninsured people would be able to buy coverage with the new tax credit.
  • A per capita cap would reduce federal spending by 6 percent over five years, requiring states to spend $1.5 billion to close the gap.

It also found that reduced federal Medicaid funding would likely result in reduced enrollment, a greater uncompensated care burden for providers, lower state revenues, and reduced economic activity. It could also hurt job growth.

What the governors think: They're not happy. A phaseout of Medicaid expansion would be "very difficult," said Alaska Gov. Bill Walker. "We've had 29,000 Alaskans that now receive health care as a result of that ... We hope we don't have to face that decision."

OTOH: Kentucky Gov. Matt Bevin is on the side of the fiscal hawks: "If [the dollars] don't actually exist, we can't keep pretending there's an endless supply of them saved up in a pot somewhere that will keep getting handed to us."

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