Medicaid cuts, CBO analysis worry Pa. and N.J. Republicans

September, 2016. Photo of Congressman Ryan Costello.

WASHINGTON -- One of the key sticking points in the debate over the Republican-led repeal of the Affordable Care Act could have a major impact on Pennsylvania and New Jersey, and is weighing on GOP lawmakers from the Philadelphia area.

Conservative groups and some House Republicans are pushing for a faster halt to the law’s Medicaid expansion -- the better, they argue, to save money and return patients to the private insurance market.

But with more than one million people in Pennsylvania and New Jersey having obtained health insurance under the expansion in the last four years, lawmakers from the area were already raising concerns about changes even before their colleagues began pushing for a more rapid approach.

“I oppose any effort to accelerate the deadline for states to phase out Medicaid expansion,” Rep. Ryan Costello (R., Pa.) said in a statement Monday -- and that’s coming from one of the few Republicans in the Philadelphia region to openly support the bill aimed at repealing Obamacare.

Another local Republican who last week voted to advance the plan, Rep. Patrick Meehan of Delaware County, also expressed reservations Tuesday after a nonpartisan analysis predicted a sharp rise in the ranks of the uninsured if the bill passes. A spokesman said a new Congressional Budget Office analysis of the costs and benefits of the GOP plan "gives Rep. Meehan pause."

"There are important reforms in this bill, but there are problems with it too," a Meehan spokesman wrote in an email. "He’s going to be speaking with his colleagues this week to determine whether it’s prudent to move forward with the legislation and whether improvements to the bill can be made."

Meehan had already expressed concern with the Medicaid provisions in the Republican proposal, even as he voted last week to move it through the Ways and Means Committee. But the CBO analysis has added to the mounting criticisms facing the bill from within the Republican Party.

Former President Barack Obama's health law expanded eligibility for Medicaid -- the program that covers medical treatment for the poor and disabled -- to people earning up to 138 percent of the federal poverty line. It promised that the federal government would pick up 90 percent of the costs for those newly eligible enrollees, instead of the roughly 50 percent it pays for other Pennsylvania and New Jersey residents.

The GOP plan calls for ending the additional federal support for anyone who enrolls after 2019. It would also cap federal aid per enrollee based on 2016 state spending, rather than growing with demand.

As it stands, proposed changes to Medicaid are projected to save the federal government $880 billion by 2026, according to the analysis released Monday by the CBO, with much of that savings paying for tax cuts included in the measure. The trade-off is that over that same time, five million fewer people would be projected to enroll in the program, due to the new limits on federal aid and the likelihood that states that have expanded coverage will scale back. New Jersey and Pennsylvania are among the 31 states and District of Columbia that have expanded Medicaid, and would have to pay more to maintain those benefits.

Overall, the CBO estimated that the bill would reduce the federal deficit by $337 billion over a decade but increase the number of uninsured Americans by 24 million, compared with current projections, over that same time.

The Medicaid change in particular was worrying local lawmakers even before the CBO report and before conservatives began pushing to speed up the revisions to as soon as next year.

Rep. Tom MacArthur (R., N.J.) said at a town hall meeting last week that he had a long discussion with Gov. Christie about the impact of a Medicaid rollback on New Jersey, where 552,000 people have gained insurance through Obamacare and the federal government has covered $2 billion worth of benefits.

Christie "gave me pretty dire predictions about what happens," MacArthur said. "So I will look carefully to make sure that whatever happens with the Medicaid expansion, it doesn’t pull the rug out from under those people. If we pull the rug out from under the most vulnerable, I can’t support that.”

He also worried about raising the financial burden on New Jersey.

“If we freeze at today’s rates but the federal government pays 90 percent going forward, I can live with that,” he said at his town hall. But he later added, “If we do a bait-and-switch, when the federal government promised 90 percent, and now, after the states have acted, we yank it away, then I’m going to have a problem.”

His office said Tuesday that he also wants to discuss the CBO analysis with House leadership.

Rep. Charlie Dent (R., Pa.) said he worried about the impact “on vulnerable populations” in Pennsylvania, where more than 700,000 have obtained  health coverage under the Medicaid expansion. Meehan had also raised concerns about the Medicaid provisions. 

A number of House conservatives want to go faster. Many come from states that rejected the expansion, and thus would feel less effect from any changes.

But local Republicans could see the impact on their doorsteps.

Gov. Wolf has crusaded against any changes to the provision.  

As the state faces the opioid crisis, Wolf's office said 125,000 people who have gained coverage under the Medicaid expansion have received treatment for substance abuse, a benefit that was previously limited under the program.

When Costello, of Chester County, voted for the GOP bill in the House Energy and Commerce Committee, he stressed that it would protect people who have already benefited and that proposed changes would be gradual.

“If you are a part of the Medicaid-expansion population, you are literally ‘legacy protected,’” he said in an interview. The changes, as currently offered, would only affect funding for those enrolling after 2019.

With Medicaid costs expected to double in the next 10 years, he said, changes are needed, and he argued that proposed tax credits would help make insurance affordable to those who might have been eligible for Medicaid.

Those supportive comments, however, came before the faster changes were proposed. The final version of the bill, with objections coming from many directions, could look different.

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