Under Obamacare Repeal Bill, States Would Lose Billions, and Millions Would Lose Insurance

by | September 22, 2017

By Noam N. Levey

The latest Republican bid to roll back the Affordable Care Act would likely leave millions of currently insured Americans without health coverage in the coming decades, and strip benefits and protections from millions more, a growing number of independent studies suggest.

Health care safety nets in dozens of states stand to lose more than $200 billion by 2026 and hundreds of billions of dollars more in the years that follow, the analyses indicate.

And while the magnitude of the coverage losses is difficult to quantify because the new GOP proposal _ authored by Sens. Lindsey Graham, R-S.C., and Bill Cassidy, R-La., _ leaves crucial details to be determined, studies of similar proposals suggest tens of millions of Americans would see major changes to their health coverage.

"The vast majority of states lose money, and some lose truly jaw-dropping amounts," said Jocelyn Guyer, managing director of Manatt Health, a consulting firm that has analyzed the Graham-Cassidy proposal.

"That suggests coverage losses that are likely somewhere between significant and vast," she said.

Analyses by other experts _ including consultant Avalere Health, the nonprofit Kaiser Family Foundation and the Center on Budget and Policy Priorities, a left-leaning think tank _ reach similar conclusions, suggesting the bill would likely erode the historic insurance gains recorded in recent years.

Since 2014, when the current health law was fully enacted, more than 20 million previously uninsured Americans have gained coverage, driving the rate of uninsured to the lowest levels ever recorded.

Fitch Ratings added its own caution, warning in a report that states would face significant "budgetary challenges" under the GOP proposal, which, in turn, could put pressure on state support for schools, cities and colleges and universities.

GOP leaders have issued repeated assurances in recent days that the Graham-Cassidy bill would not erode protections extended by the 2010 law, often called Obamacare.

"More people will have coverage, and we protect those with pre-existing conditions," Cassidy said Wednesday in an interview with CNN.

But as they rush to vote, Republican lawmakers are not waiting for an independent analysis by the Congressional Budget Office, or CBO, which lawmakers customarily rely on to asses the impact of large, complex bills. A spokeswoman for Senate Majority Leader Mitch McConnell, R-Ky., told Politico on Wednesday that McConnell is planning a vote next week.

President Donald Trump added his encouragement from New York, where he is attending the U.N. General Assembly.

"They're going to do a great job," the president told reporters, noting many GOP lawmakers had been embarrassed by their inability to pass a repeal bill. "If this happens, it will be a great thing for the country."

CBO analyses of previous GOP repeal plans have estimated coverage losses of 20 million or more.

And Republicans' claims about the current bill are contradicted by virtually every independent analysis, as well as assessments by leading patient advocates, hospital groups, insurers and physicians.

No major group representing patients or people who work in the health care system backs the Graham-Cassidy proposal.

Even health insurers that have largely remained quiet in this year's repeal debate publicly criticized the GOP plan Wednesday.

The Blue Cross Blue Shield Association cautioned the plan would likely destabilize insurance markets, "making coverage more expensive and jeopardizing Americans' choice of health plans."

Also joining opposition to the bill Wednesday was New Jersey Gov. Chris Christie, who warned that Graham-Cassidy would hurt residents of his state.

Christie, who heads the president's opioid commission, was the seventh GOP governor to publicly oppose the proposal. Fifteen Republican governors sent a letter this week backing Graham-Cassidy.

Late-night TV host Jimmy Kimmel jumped into the debate as well, deriding Cassidy in his monologue Tuesday for going back on a promise he made to Kimmel earlier this year that he would not back any plan that didn't protect sick Americans.

"This guy, Bill Cassidy, just lied right to my face," said Kimmel, who earlier this year recounted his newborn son's congenital heart condition in an emotional discussion about the importance of robust insurance protections.

Previous studies by the Congressional Budget Office have concluded that proposals like Graham-Cassidy, which gives states authority to waive insurance protections and allow insurers to charge sick consumers more, would result in substantial coverage losses.

The centerpiece of the GOP bill is a new system for distributing hundreds of billions of dollars of federal money that would restructure how the government provides health care assistance to some 80 million Americans.

That would represent the nation's largest change in the way health care is financed in more than half a century.

The bill would effectively end both the current Medicaid program, which covers poor Americans, and the system of insurance subsidies made available by the 2010 health care law to help low- and moderate-income consumers buy health plans.

In place of these programs, the federal government would give states blocks of money to redesign their health care safety net, while also capping future federal support for states.

The expanded flexibility would allow states to create better programs that cost less, Graham and Cassidy have said.

But any benefits from more flexibility would likely be outweighed by the very large reductions in aid, said Dan Mendelson, president of Avalere Health, which calculated that Graham-Cassidy would reduce federal funding to states by $215 billion over the next decade.

"This is a substantial cut to Medicaid funding and no one should be unclear about that," he said. "There would undoubtedly be major coverage losses in places like California, where the state would not be able to support continued coverage expansion."

States like California, which have moved aggressively to expand coverage through the 2010 law by expanding Medicaid eligibility and investing in a robust insurance marketplace, stand to lose the most under Graham-Cassidy, Avalere and others suggest.

Other blue states that have traditionally offered strong health care safety nets also stand to lose billions. So, too, do a number of red states that have expanded coverage through the 2010 law, including Arkansas, Arizona, Kentucky, Louisiana and Ohio.

States that have not expanded coverage stand to gain money in the short term because of a formula in Graham-Cassidy that effectively reallocates money between states.

But over the long term, all states will see cuts, Fitch and other analysts noted.

That is true particularly after 2026, when Congress would have to find more than $1 trillion to continue federal health care aid to states.

"There is no guarantee of whether and at what level federal funding would be available beginning in 2027," Manatt Health notes in its analysis.

(Times staff writer Lisa Mascaro in Washington contributed to this report.)

(c)2017 Los Angeles Times