States face major funding and coverage cuts under GOP healthcare plan, warns report presented to governors

Capitol Hill
Healthcare policy loomed large at the National Governors Association's winter meeting in the nation's capital.

Under an Affordable Care Act replacement plan floated by Republicans, states would see drastic reductions in their federal funding as well as the number of insured residents, according to a presentation given to governors this weekend.

The slideshow, a copy (PDF) of which was first obtained by Vox, lays out the findings of an analysis by Avalere Health and McKinsey and Company that examined the GOP’s recent repeal-and-replace outline. It was presented Saturday during a closed-door meeting of the National Governors Association that also included Department of Health and Human Services Secretary Tom Price, according to the Associated Press.

The analysis estimates that a typical Medicaid expansion state would see a 65% decline in funding, or about $635 million less, under the GOP’s plan to replace income-based tax credits with age-based tax credits and eliminate cost-sharing reduction payments. In addition, the state’s individual market enrollment would shrink 30%.

A nonexpansion state, meanwhile, stands to lose $885 million in federal funding, or an 80% decline, as well as see a 50% drop in its individual market enrollment.

The analysis also estimated the effects of the GOP’s plan to change how Medicaid is funded. Under a per capita cap arrangement, an expansion state would see its federal funding drop by 24% over five years, requiring it to spend $6.2 billion to close the gap. A nonexpansion state would see a 6% decline in federal funding, forcing it to spend an additional $1.5 billion.

Gov. Jay Inslee, a Democrat from Washington, said the presentation outlined “very disturbing” scenarios that he wants to make sure don’t come to fruition, according to Vox.

Indeed, even Republican governors are struggling to come to a consensus about how best to replace the ACA without penalizing either Medicaid expansion or nonexpansion states, Politico reports. For example, Ohio Gov. John Kasich, who met Friday with President Donald Trump, said a draft House bill that would scrap Medicaid expansion is “unacceptable.”

“There's a lot of ideas, a lot of moving parts, a lot of governors with different ideological perspectives—all of that is in the cauldron right now,” said Kentucky Gov. Matt Bevin, who has moved to scale back Medicaid expansion in his state.