Obamacare repeal could force tough decisions on states

Published 6:27 pm Saturday, December 10, 2016

WASHINGTON – Repealing President Barack Obama’s signature healthcare law could bring difficult choices for states, which face the loss of hundreds of millions of dollars to provide health care for the poor.

That, in turn, could fire up heated debates in state capitols over how to make up the gap.

Among states’ choices if President-elect Donald Trump makes good on promises to repeal the law are raising taxes or eliminating coverage for some below the poverty line.

It could also lead more states to create controversial requirements, as in Indiana and Kentucky, for those getting benefits to work or pay for a portion of coverage.

Health experts worry that will lead to some losing insurance.

On top of that, House Republicans and Trump’s nominee for health and human services secretary, Rep. Tom Price, R-Ga., have called for an end to Obamacare funding for 31 states that now provide Medicaid coverage to people making more than the poverty line.

The expansion allows coverage for a family of three making up to $27,821 per year, or a single person making $16,000.

In Pennsylvania, 680,000 more people have gotten insurance because of it. Of those, Medicaid pays for 63,000 to get drug or alcohol treatment, said Jeff Sheridan, spokesman for Democratic Gov. Tom Wolf.

Losing coverage will be “devastating” to the state’s fight against the opioid and heroin crisis, he said.

To continue providing insurance for all those who stand losing coverage would cost Pennsylvania $3.6 billion, he added.

After campaigning on a repeal of Obamacare, Trump and congressional Republicans have to figure out what will replace the controversial health care reforms.

Congressional leaders say they’ll move to repeal Obamacare early in the near year, but it won’t take effect for a couple of years, as they sort out what comes next.

Senate Majority Whip John Cornyn, R-Texas, acknowledged that a number of details need to be worked out in a “multi-year transition.”

He said, however, there will be a “bipartisan” approach to come up with a replacement.

“One of the biggest problems (with Obamacare) was that it was a strictly-partisan exercise,” he told reporters Wednesday.

Obamacare has faced a number of problems, including double-digit increases in premiums in some areas by insurers participating in its healthcare exchanges.

However, 20 million more Americans have gotten coverage under the program, particularly in states that accepted federal funds to cover more people under Medicaid.

In rural western Kentucky, Emerson Goodwin, regional manager of KentuckyCare, said more people come into its clinics for screenings and medication for chronic diseases such as diabetes.

That tracks with a Harvard School of Public Health study of Arkansas and Kentucky, which expanded Medicaid, and Texas, which did not.

House Speaker Paul Ryan, R-Wisc., told the Milwaukee Sun Sentinel this week, “Clearly there will be a transition and a bridge so that no one is left out in the cold.”

Ryan told CNN that House Republicans plan to give people who lose Medicaid coverage tax breaks to pay for private insurance.

But the Center on Budget and Policy Priorities, a left-leaning think tank, said the maximum $3,000 subsidy that House Republicans have previously proposed isn’t enough for the working poor to afford private coverage.

Repealing Obamacare without a plan to replace it “would leave Kentuckians without any way of knowing whether they can go the doctor,” said Emily Beauregard, executive director for Kentucky Voices for Health.

“It would leave people with a looming cliff in front of them,” she said.

Trump and Ryan have also proposed giving states block grants or a set amount of Medicaid funding, instead of a percentage of what they spend.

States would lose money under that approach, which doesn’t account for factors such as more people signing up for coverage during a recession or the cost of dealing with public health crisis like the opioid epidemic, according to several studies.

Losing funds could result in “severe cuts in benefits for patients and in payments to doctors, hospitals and nursing homes,” said Sen. Elizabeth Warren, D-Mass., who described it as a “crushing blow to millions of Americans.”

Cornyn said states and the federal government have shared the costs of Medicaid. “What the appropriate sharing formula is going to be still has to be worked out,” he said.

The House Republicans’ budget this year called for cutting Medicaid funding by $1 trillion – or about one-quarter – over the next decade, according to the Center of Budget and Policy Priorities.

A benefit of their proposed block grant approach is giving states more freedom to run Medicaid as they wish.

“We need to push more decisions outside of Washington and into the states,” Cornyn said.

For example, states may look to save money by requiring recipients to work or pay for a portion of their coverage, wrote Matthew Glans, senior policy analyst for the free-market Heartland Institute in a paper. That would also address concerns that Medicaid recipients get a free ride with no “skin in the game” to keep themselves healthy.

But the need to make up the funding loss could push states to enact policies like requiring them to pay for insurance.

Goodwin said paying a portion of premiums will put Medicaid recipients in a bind of having to decide whether to pay for healthcare or other bills.

Trump’s nominee to head the federal Centers for Medicare and Medicaid Services, Seema Verma, has been an advocate for more requirements as a consultant to Indiana and Kentucky. It’s unknown if she will move immediately to impose similar requirements nationally.

In the short term, Verma’s appointment could make way for tougher requirements in some states.

In September, the Obama administration rejected Ohio’s proposal to require all Medicaid recipients to pay up to $8.25 per month, citing an estimate that 125,000 people would lose coverage.

Ohio Medicaid spokeswoman Melissa Ayer said in an email Thursday, “We’re hopeful that states will soon have greater flexibility to manage our own programs in a way that best fits the unique needs of our citizens. We believe encouraging personal responsibility in health care is key to helping individuals move up and off of Medicaid.”

Kentucky Gov. Matt Bevin was asked at a press conference last week whether Trump’s election makes it more likely the state’s proposal would be approved, according to news reports.

“You bet,” he said.

Kery Murakami is the Washington, D.C. reporter for CNHI’s newspapers and websites. Contact him at kmurakami@cnhi.com