The current Senate proposal to repeal and replace the Affordable Care Act could impact more than a quarter of the state’s population -.- those Michigan residents covered by Medicaid or programs created by the ACA.
The Graham-Cassidy-Heller-Johnson bill would change the funding structure for traditional Medicaid, end the Medicaid expansion and reduce funds available for subsidizing private insurance.
In all, the bill would reduce the state’s projected federal funding for those programs by about 6 percent between 2020 and 2026, according to two independent analyses released this week.
In state-by-state breakdowns of the Graham-Cassidy bill, the Kaiser Family Foundation estimated the bill would cost Michigan about $7.8 billion in lost funding between 2020 and 2026, while Avalere Health estimates the state would lose $8 billion.
The state’s funding deficit would increase to $17 billion in 2027 when the bill ends all funding currently allotted for insurance coverage expansions under the ACA, Avalere said.
“It would be very devastating to the state of Michigan,” said Marianne Udow, director of the Center for Healthcare Research and Transformation in Ann Arbor. “I think it’s worse than full repeal (of the ACA) because it does more than full repeal. It fundamentally changes the Medicaid program.”
About 1.8 million Michigan residents are insured by traditional Medicaid; 658,000 are covered by Healthy Michigan, the state’s Medicaid expansion, and 250,00 get subsidized insurance through the individual ACA marketplace.
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The Graham-Cassidy bill would take effect in 2020, ending the Medicaid expansion, subsidies for those purchasing insurance on the individual market, and the individual and employer mandates, as well as the traditional Medicaid funding structure.
In its place, states would be provided with block grants to fund health insurance coverage.
The block-grant formula takes the money spent now on the ACA’s coverage expansions and divides it between states on a per-capita basis. That means states such as Michigan, which expanded Medicaid, would lose money to states such as Texas and Florida, that did not.
Moreover, increases in the grants would be capped and funding currently spent on the ACA’s coverage expansion would end in 2027.
The bottom line, Avalere said: States would have more flexibility, but “significantly” less money to do it.
The bill’s Republican proponents in Congress say it would fulfill the GOP’s pledge to repeal and replace the ACA. It also would give states control over government health-care spending.
Fifteen Republican governors have endorsed the bill, but five others — including Ohio Gov. John Kasich and New Jersey Gov. Chris Christie — are opposed, citing concerns about the funding changes.
The office of Michigan Gov. Rick Snyder did not respond to MLive’s request for comment.
The National Association of the Medicaid Directors is opposing the bill, saying “the envisioned block grant would constitute the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history,”
The bill faces also opposition from a long list of health-care interest groups, from the American Medical Association to AARP to Blue Cross Blue Shield and tAmerica’s Health Insurance Plans.
The head of the AMA issued a statement saying the bill would “result in millions of Americans losing their health insurance coverage, destabilize health insurance markets, and decrease access to affordable coverage and care.”
“Every interest group has come out against this bill,” Udow said, adding she is “quite concerned on many levels.”
Among her specific concerns:
- The bill is being rushed through because the Senate only has until Sept. 30 to pass a health-care bill with a simple majority. “This would be a dramatic change to one-sixth of our economy, and it would be done without any hearings or detailed analysis” from the Congressional Budget Office, Udow said.
- It would end the employer and individual mandates to have insurance in 2018, creating “immediate chaos” in the marketplace, she said. Without a legal mandate to buy insurance, healthy individuals are likely to stay opt of insurance coverage, which will drive costs for those stay in the market.
- By replacing the ACA with block grants starting in 2020, states would have only two years to create a new health-care system from scratch, Udow said. “We’re talking about making huge, sweeping changes with very little time to figure it out, plus you have less money to do it.”
- After 2026, the money being spent to expand coverage under the ACA ”all goes away,” Udow said.
- The bill would change traditional Medicaid funding from an open-ended program to a block grant. Currently, the federal pays a fixed share of the bills, whatever they may be. Under the Senate bill, the states would get a fixed amount starting in 2020.
“Michigan would be far worse off” under this bill than under the ACA, Udow said. “This is all about politics and not about policy.”