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State Money Lost With Health Law Repeal02/26 09:18

   WASHINGTON (AP) -- A sobering report to governors about the potential 
consequences of repealing the Obama-era health care law warns that federal 
spending cuts probably would create funding gaps for states and threaten many 
people with the loss of insurance coverage.

   The Affordable Care Act has two main components for expanding coverage: 
subsidized private health insurance available in all 50 states, and an optional 
Medicaid expansion that has been accepted by 31 states and the District of 
Columbia. Those two components of the health law cover more than 20 million 

   A report by the consulting firm Avalere Health concluded that the changes 
under consideration by the GOP-led House would reduce significantly federal 
dollars for Medicaid and subsidized private insurance.

   The effect on Medicaid would be far-reaching. The federal-state program for 
low-income people covers more than 70 million Americans, many of whom have high 
health-care needs.

   The Associated Press obtained a copy of a slide presentation made by Avalere 
to governors meeting this weekend in Washington.

   The report said the combination of phasing out Medicaid expansion money from 
the U.S. government, plus transforming the overall program from an open-ended 
federal entitlement to one that operates under a cap would likely result in 
state funding gaps. States that expanded Medicaid would face the deepest cuts.

   States would get more flexibility to design their programs, but the money 
crunch could lead to cuts in eligibility, benefits, or payments to hospitals 
and other service providers. The impact of federal spending reductions would 
compound over time.

   The private insurance subsidies provided under Obama's law would also be 
scaled back, according to the report.

   Although states would get some additional safety-net funding, reductions in 
federal insurance subsidies would expose some consumers to new costs for their 
coverage. That would probably result in fewer people covered, as some consumers 
drop their plans.

   According to the Kaiser Family Foundation, Medicaid consumed an average 19 
percent of state budgets in 2015, the most current year available, ranging from 
7 percent in Utah to 41 percent in New Hampshire.

   Budget hawks including House Speaker Paul Ryan, R-Wis., support the kind of 
program flexibility GOP governors are seeking, but chiefly want to spend less 
on Medicaid.

   Gov. John Kasich, R-Ohio, said he thinks "there's going to be a problem in 
the House of getting anything out of there that still provides coverage to 
people. That's why the Republicans have to reach out to some of the Democrats. 
I don't know whether this is going to happen," he told CBS' "Face the Nation."

   Governors on Saturday met privately with Health and Human Services Secretary 
Tom Price, who according to several of the state leaders said the Trump 
administration wanted to work with states to overhaul health care, but he did 
not provide specifics.

   A Medicaid proposal by GOP governors, a draft of which was obtained by the 
AP, urges Congress to change Medicaid from an open-ended federal entitlement to 
a program designed by each state within a financial limit.

   Some of the governors behind the proposal, including Kasich, opted to expand 
Medicaid in their states despite pressure from conservatives.

   "I think there are some very conservative Republicans in the House who are 
going to say just get rid of the whole thing. And that's not acceptable," he 

   He added: "Republicans can go and do what they want, and I'm going to talk 
to them. But at the end of the day I'm going to stand up for the people that 
wouldn't have the coverage if they don't get this thing right. And I happen to 
believe that the best way to get this right over time is for actually both 
parties to work together. I know that's considered an impossibility now, but 
what's at stake is not some political thing. What's at stake here are 20 
million Americans."


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