Studies say ACA repeal would cut funding, raise costs for sick

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The latest Republican proposal to repeal and replace Obamacare cuts federal healthcare funding while potentially increasing costs for people with pre-existing conditions, according to two independent analyses.

The bill, backed by Republican Senators Lindsey Graham, Bill Cassidy, Dean Heller and Ron Johnson, would cut U.S. spending on the Affordable Care Act’s expansion of health coverage by about $81.6 billion through 2026, according to an analysis by consultancy Manatt Health. When the bill’s caps on the broader Medicaid program are included, spending would drop by $215 billion, according to consulting firm Avalere.

The analyses present more obstacles for the renewed push to undo the Affordable Care Act ahead of a September 30 legislative deadline. Late Tuesday, the talk-show host Jimmy Kimmel, whose emotional appeal helped crystallize opposition to an earlier repeal-and-replace bill, told viewers to oppose the new legislation. Kimmel said Cassidy, a medical doctor from Louisiana, lied when he previously promised on Kimmel’s program that any health overhaul would protect sick children.

“I’m sorry he doesn’t understand,” Cassidy said in an interview on CNN on Wednesday. “More people will have coverage, and we protect people with pre-existing conditions.” Cassidy said his law would have the same protections for sick people as under Obamacare.

Broadly, the Graham-Cassidy bill keeps most of Obamacare’s taxes, while undoing the law’s insurance expansion and redirecting the funds to states as block grants. That would give the states broad discretion over how to use the funds. At least 20 million people have gained insurance coverage under Obamacare, mainly through the expansion of the Medicaid program to more low-income people.

The nonpartisan Congressional Budget Office, which evaluates legislation for lawmakers, has said it won’t have time to evaluate the full effects of the repeal plan before a potential vote next week. CBO said it plans to publish a more limited analysis by early next week.

Neither of the consultant reports estimated how many people overall could lose insurance coverage.

The flexibility granted to the states could allow them to set up insurance markets where individuals who have so-called pre-existing conditions are charged more than others, according to the Manatt analysis. States could also potentially remove other pieces of the ACA’s insurance regulations, including requirements that health plans cover essential health benefits, such as prescription drugs, hospitalization and maternity care.

“In states that obtain waivers, individuals with pre-existing conditions could face substantially higher premiums in the individual and small group markets, or find their policies do not cover essential services,” according to the Manatt analysis.

Because the bill depends on states to implement it, the exact effects on coverage are difficult to estimate. Manatt said that over the 2020-2026 period, when the bill is designed to go into effect, 29 states would receive less federal funding than under Obamacare, with an average cut of 19 percent. The funding ends after 2026, creating a severe dropoff in healthcare payments, though supporters of the law have said it would be reauthorized.

The analysis from Avalere finds that when the broader Medicaid cuts are taken into account, 34 states and the District of Columbia would see reductions in federal funding over the 2020 to 2026 period, while 16 would gain. The Avalere analysis was funded by the left-leaning Center for American Progress.

The bill has drawn opposition from a broad swath of healthcare groups, including the American Medical Association and the American Hospital Association. The Blue Cross Blue Shield Association said on Wednesday that it is opposed to the plan.

“The bill contains provisions that would allow states to waive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions,” the insurer group said in a statement. “The legislation reduces funding for many states significantly and would increase uncertainty in the marketplace, making coverage more expensive and jeopardizing Americans’ choice of health plans.”

Republican lawmakers have been pledging to repeal and replace Obamacare since it was signed into law in 2010, but some right-leaning groups have been lukewarm on the Graham-Cassidy approach because it leaves much of the law’s taxes in place.

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