PROVIDENCE, R.I. (WPRI) – Acting Health and Human Services Secretary Anya Rader Wallack is calling President Trump’s proposed Obamacare replacement “a grave threat” to Rhode Island’s health care system, arguing it will cut hundreds of millions of dollars in federal funding and make insurance more expensive for older residents.
Wallack briefed reporters Wednesday on what she termed “the disastrous effects we think the Trumpcare proposal would have on Rhode Island, and particularly how it would set us back in terms of the progress we’ve made under the Affordable Care Act.” The state’s uninsured rate has fallen from nearly 12% to under 5% in recent years.
The debate in Congress has huge implications for Rhode Island. Health care is one of the largest sectors of the state economy, and Medicaid, the massive state-federal insurance program for low-income people, makes up about one-third of the $9-billion state budget. The state is already facing large projected deficits in future years even before any federal cuts.
Wallack’s biggest concern is the Republican push to reduce how much of the tab the federal government picks up for individuals who became eligible for Medicaid under Obamacare: it’s 90% under current law but 50% under the new bill. Roughly 70,000 Rhode Islanders are enrolled in that part of Medicaid.
Wallack’s office estimates that by 2024 Rhode Island lawmakers would need to come up with $220 million a year in state funding to replace the lost federal money for the Medicaid expansion group, or eliminate their coverage. In addition, a new Urban Institute study suggests the GOP bill would slice regular federal Medicaid funding to Rhode Island by $3 billion over its first decade, a 15% cut, by switching the program to a per-capita system.
“It’s hard to fathom that Rhode Island could make up for all the funding losses that are contemplated here,” Wallack said.
The opposition to the GOP bill from Gov. Gina Raimondo’s administration is no surprise; the first-term Democrat has been a staunch supporter of former President Obama’s health law. The state’s all-Democratic congressional delegation is also lockstep in opposition to the proposal.
Republicans have insisted Obamacare is set to unravel on its own without changes, and argue their bill – called the American Health Care Act – represents a conservative alternative that will lower the deficit and reduce government involvement in the health care sector. The House is expected to vote on the bill Thursday, though its prospects are uncertain in the Senate.
“It’s time to turn a page and rescue our health care system from this disastrous law,” Republican House Speaker Paul Ryan said recently. “The American Health Care Act is a plan to drive down costs, encourage competition, and give every American access to quality, affordable health insurance.”
Zachary Sherman, executive director of the HealthSource RI insurance marketplace Rhode Island set up under Obamacare, offered a different take. He said he expects some of the roughly 30,000 people who buy private plans through HealthSource RI to be priced out under the GOP bill because it reduces tax credits for lower-income people and allows insurers to charge older Americans more.
“There are definitely winners and losers,” Sherman said.
Lifespan, the state’s largest hospital group, expressed grave reservations about the potential Medicaid cuts in a statement Wednesday.
“If the state can’t provide the $220 million Rhode Island would lose in Medicaid funding under this bill, the consequences would be devastating for the people who need health care and those providing it,” Lifespan said. “It threatens Lifespan’s financial stability, and for the neediest people in the state, it threatens their ability to get the health care they need.”
Republicans have suggested a number of provisions in the bill could mitigate some of the concerns being expressed about it, including $100 billion for states to stabilize their insurance markets, a newly added pot of $75 million to reduce premiums for older Americans, and added flexibility on Medicaid rules.
House Republican Leader Patricia Morgan said expanding Medicaid eligibility was already going to cost Rhode Island a significant amount of money, even without the reduction in the federal reimbursements that Congress is considering. She also said Obamacare itself has been “a real damper to prosperity.”
“It’s my understanding that the federal government will be giving us a pool of money, but it will be in our court,” Morgan said. “Will it be hard to do? Obviously, it will be hard to do. But we will be able to come up with solutions to make that money stretch to still give everybody good health care, but at the same time lower the cost of providing health care.”
Wallack and Sherman argued the GOP bill’s provisions would not mitigate the problems they foresee in Rhode Island if the bill passes, and also said not enough details have been offered to understand their impact. On Medicaid, Wallack argued, “any amount of flexibility isn’t going to make up for the fact that we’re going to have a huge funding shortfall.”
The Republican health legislation would not repeal all of Obamacare. It would maintain the current health law’s bans on refusing to insure people who have pre-existing conditions or holding them to annual and lifetime coverage limits. It would also allow young Americans to stay on their parents’ insurance until age 26, and keep in place the 10 “Essential Health Benefits” required to be covered by all plans.Ted Nesi (firstname.lastname@example.org) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram