The GOP plan to repeal and replace the Affordable Care Act — which was leaked to Politico and reported on Friday — would eliminate the money given to states for Medicaid expansion starting in 2020.
It would decrease the subsidies people receive for buying health insurance on the individual market, instead putting in tax credits that would increase as users age.
And it would change the way the federal government helps fund Medicaid by paying a lump sum per person every year rather than matching state dollars spent on beneficiaries.
Those changes would cost Kentucky, according to a new report.
Under Obamacare, the state would get $2.9 billion in 2019 to help cover the hundreds of thousands of beneficiaries who receive care under the expansion.
But with the planned repeal and replace plan, the state would pay almost $1 billion to keep those people in the program. That’s a 300 percent increase from what it will pay with the plan as-is.
That’s according to a new report out Friday from the left-leaning Center for Budget and Policy Priorities.
Capping the amount the feds would pay Kentucky for Medicaid beneficiaries could put the state in a tight spot if there was a public health crisis like an outbreak of Hepatitis C, Zika or even something as simple as a bad flu season that leads to more hospitalizations.
While the state already gives Medicaid health insurance plans a set amount to manage a person’s services, the change would mean the state had even less money for plans to manage people’s care.
“States would likely lower the amounts they would pay to managed care companies to stay within these new budgets,” said Judith Solomon, vice president of health care policy at CBPP. “You might see initially states shifting responsibly to managed care companies to figure out what not to provide. But coupled with the ability to cut people off and cut benefits, the ability to pay plans less, there’s not much protection.”
Bevin Working to Change Medicaid Expansion
Gov. Matt Bevin has asked the federal government to allow his administration to make changes to the current Medicaid program. Those changes would put in place premiums or co-pays, no matter how low their income.
Under the GOP’s plan, those changes would not need federal government approval; states could change the program as they see fit.
Medicaid funds go to pay for all the doctors, nurses, pharmaceutical drugs and other services people get through their Medicaid coverage. A previous analysis from the Foundation for a Healthy Kentucky found the state would lose 45,000 jobs if the Affordable Care Act were repealed.
The GOP plan could be officially released as early as next week but is expected sometime in March. Solomon said Republicans are facing big hurdles as they proceed.
Employers currently get big tax breaks for offering good health plans to employees. The GOP plan would stop the tax breaks if the benefits cost too much as a way to pay for the plan. That idea was also in the Affordable Care Act, and the business community lobby heavily against it.
An Obamacare repeal could also cause as many as 18 million people who currently have insurance to lose it in the first year after repeal, according to an estimate from the nonpartisan Congressional Budget Office. By 2026, that number would increase to 32 million, the CBO found.