GOP health overhaul puts pressure on state governments

Associated Press

CHERRY HILL, N.J.

The Republican health care plan means less money for states and gives them a tough choice: Find a pot of cash to make up the difference or let coverage lapse for millions of lower-income Americans.

Governors and state lawmakers analyzing the Republican plan to replace former President Barack Obama’s Affordable Care Act fear a return to the past, when those without health coverage used emergency rooms for their medical needs. That uncompensated care was written off by hospitals or billed to the state.

The ax would fall especially hard on Medicaid, the state-federal program that provides health care to the poor and lower-income workers.

In Washington, for example, state officials say they would have to come up with $1.5 billion a year starting in 2020 to keep coverage in place for about 600,000 residents who gained coverage through the Medicaid expansion that was a key part of Obama’s health care law.

“It would actually leave our nation worse off than before the ACA was implemented,” Gov. Jay Inslee, a Democrat, said in a written statement.

Most states don’t yet have firm cost estimates on the consequences of the proposal by Republicans in the U.S. House. A Congressional Budget Office analysis released Monday said the GOP plan would lead to 24 million Americans losing health care coverage over the next decade but did not provide a state-by-state breakdown.

In addition to Medicaid, states are concerned about the Republican plan to replace federal premium subsidies for people who buy private insurance with tax credits that would be adjusted based on age, with older people paying more. If the cost of health insurance is too great under the GOP plan, people might drop coverage and rely instead on emergency rooms.

Connecticut estimates that 34,000 people who buy policies in the insurance marketplace would drop their coverage under the GOP plan. Overall, it would add about $1 billion in annual costs for the state, equivalent to 5 percent of its budget.

It is the GOP’s proposed changes to Medicaid, which has become the largest source of federal revenue for states, that have drawn the most reaction since the CBO report was released.