House Reveals Proposed Health Care Revision #2

There is more to the Republican proposal to replace Obamacare than eliminating the mandate for individuals to buy health insurance and tax credits for doing so. Another big issue is Medicaid funding, which affects state governments that administer Medicaid and providers such as hospitals and doctors. The Republican proposal calls for a fundamental change to Medicaid. No longer will the federal government commit states to cover a certain set of benefits; rather, it will be a fixed block grant from the federal government to the states based on current costs, adjusted annually to reflect inflation. Long-run this likely means less money for Medicaid. Providers, especially hospitals, have criticized the proposal. 

“When Colorado expanded Medicaid coverage under former President Barack Obama’s health care law, the largest provider in the Denver region hired more than 250 employees and built a $27 million primary care clinic and two new school-based clinics.

"Emergency rooms visits stayed flat as Denver Health Medical Center directed many of the nearly 80,000 newly insured patients into one of its 10 community health centers, where newly hired social workers and mental health therapists provided services for some of the county’s poorest residents. Demand for services at the new primary care clinic was almost immediate.

"The hospital system, like others around the country, now is facing enormous uncertainty under the health care overhaul proposed by congressional Republicans.

"The GOP plan would scale back the Medicaid expansion and take away direct federal subsidies to help consumers pay their health insurance premiums, replacing them with age-adjusted tax credits.

"Denver Health could see revenue losses between $50 million and $85 million by 2020, which is between 5 and 9 percent of their annual revenue, according to the hospital’s chief financial officer. Adding to the financial anxiety is that Denver Health and many other hospital systems and medical providers across the country still would be required to care for many of the same patients, even if they lost their health coverage. That would leave hospitals, state and local governments, or privately insured patients to foot the bill" (link).

“The Congressional Budget Office on Monday projected that the House leadership’s American Health Care Act would result in 24 million Americans losing their health insurance while raising premiums for those covered on the individual market. Their bill would lower federal deficits by $337 billion over 10 years, largely as a result of cuts to Medicaid that would reduce its enrollment by 14 million, according to the estimate.

“Democrats had criticized Republicans for advancing their legislation through two key committees without a cost projection from CBO [and] anticipating … that the CBO would validate their claim that the GOP bill would strip coverage from millions. Republicans, meanwhile, have been downplaying the CBO for days in an effort to take the sting out of its projection and prevent wavering members from withdrawing their support" (link).