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Long-term reductions in coverage, will largely be tied to changes in Medicaid enrollment policies. What does this mean for state governments?
The Congressional Budget Office, the nonpartisan agency tasked with studying the cost and long-term impacts of legislation, released its highly anticipated analysis of Republican-sponsored legislation to replace the Affordable Care Act.
The CBO has determined that, if passed, the American Health Care Act, as the House GOP plan is called, would cause 14 million people to become uninsured next year.
And, the CBO has found that under that bill, a total of 24 million Americans will be uninsured by 2026.
Those long-term reductions in coverage, will largely be tied to changes in Medicaid enrollment policies. In 2026, the agency says, an estimated 52 million people will be uninsured, compared with the 28 million predicted to be uninsured under the current law.
The CBO has also found that the Republican bill would reduce the federal deficits by $337 billion over the next decade, owed largely to savings related to reduction in Medicaid spending and from the AHCA’s cuts to subsidies for those who do not get health insurance through an employer plan. In total, major alterations to Medicaid would decrease direct spending by over $880 billion in the period from 2017-2026.
These findings related to the cost-saving qualities of the GOP bill may make the plan an easier sell to some conservative lawmakers who have expressed criticism that the legislation doesn’t go far enough in distinguishing itself from the existing law. But, in the Senate, several GOP lawmakers have been vocal in their refusal to support any replacement bill that does not protect the gains in coverage made by ACA-related Medicaid expansion.
What Does This Mean for State Governments?
As a result of the stark decrease in federal reimbursements for Medicaid spending—as much as a $2.1 trillion reduction over the next decade—states will face tough decisions going forward.
State governments across the country will need to decide whether to spend more of their own money to maintain their respective Medicaid programs as they currently stand under the ACA, or whether they will decrease spending through a variety of approaches predicted by the CBO.
Those approaches could involve cutting payments to providers and health plans, eliminating optional services, restricting enrollment eligibility requirement, or attempting to find more efficient ways to deliver health services, or some combination of all of the above.
And, as Route Fifty reported last week, many states will be making these critical spending decisions in a fiscally uncertain atmosphere.
Among state leaders, Pennsylvania's Democratic governor, Tom Wolf, was among the first to respond to the CBO’s estimates. In a statement, Wolf said: “The CBO score confirms that Pennsylvanians, including seniors, people with disabilities and those in treatment, will be worse off under the AHCA and that any assurances otherwise were either untrue or disingenuous—or both.”
Montana Gov. Steve Bullock, also a Democrat, said in a statement: "Ripping health care away from thousands of Montanans, cutting off the lifeline to our hospitals, and keeping our taxpayer dollars back in Washington, D.C., is a sucker-punch to rural states like Montana."
Quinn Libson is a Staff Correspondent for Government Executive’s Route Fifty based in Washington, D.C.