06.07.17

By: Jonathan D. Salant
Source: NJ.com

N.J. bill for Medicaid would soar by $810M under Trump Obamacare repeal

WASHINGTON -- New Jersey taxpayers would have to pay an extra $810 million to cover the 560,000 residents now receiving health care under the Medicaid expansion that the House Republican legislation would repeal, according to a new study.

That would increase the state's costs by 227 percent in 2021 over current levels, according to the Center on Budget and Policy Priorities, a progressive research group in Washington.

Should the state not pick up the extra costs, about 374,000 New Jerseyans would lose their health coverage due to the Republican reductions, according to New Jersey Policy Perspective.

And those who lose their Medicaid benefits won't be able to find affordable insurance because the Republican bill also reduces the subsidies that hold down premiums, CBPP study released Tuesday said.

"New Jersey has one of the highest costs of living in the nation so the poor have no disposable income available to pay for any health care," said Ray Castro, NJPP's director of health policy. "So expecting these same New Jerseyans, who cannot make ends meet now, to pay thousands of dollars for private insurance is just ridiculous and should be vigorously opposed. 

Under the GOP's American Health Care Act, which the Congressional Budget Office said would leave 23 million fewer Americans with coverage, the government in 2020 will stop covering 90 percent of the costs of new enrollees in New Jersey and other states that expanded Medicaid under the Affordable Care Act.

Instead, the federal government would pay only 50 percent of the costs in the Garden State.

The cuts are part of the House Republican bill's $834 billion reduction in Medicaid spending. States would receive a fixed sum each year rather than a flexible amount depending on their number of recipients. The savings largely would finance tax cuts for corporations and wealthy Americans.

The 90 percent match would remain for existing recipients as long as they do not drop out of the Medicaid program, but most do from time to time because they are able to find temporary jobs. By end of 2024, for example, just 5 percent of those on Medicaid would be eligible for the extra federal dollars, according to CBPP. 

Should New Jersey try to continue covering everyone, its bill in 2021 would rise to $1.2 billion from $356 million, as the federal share would drop to $2.4 billion from $3.2 billion.

The Senate now is considering the health care bill. Trump's legislative affairs director, Marc Short, said he expected the Senate legislation to look a lot like the House version.

"I probably suspect that there's going to be a lot of similarities," Short said at a White House briefing.

"We are looking forward to delivering the choice and control that Americans want in their own individual health plans," Short said. "We're looking forward to delivering the affordability that Americans need and the quality that they deserve."

The Republican bill would do nothing of the sort, the CBPP study said. A 60-year-old New Jersey resident now at the poverty line of $12,600 a year would pay an annual premium of $8,642, or 69 percent of his or her income, not including deductibles and co-pays. That person now pays nothing, thanks to Medicaid.

In addition, low-income Americans are more likely to have pre-existing conditions such as heart disease and diabetes, said Tara Straw, CBPP senior policy analyst, The House GOP bill allows states to seek waivers allowing insurers to charge higher premiums to sicker customers.

"In practice, poor people would not be able to afford health insurance premiums," Straw said. "Even if they could somehow afford the high premiums, they would face high deductibles and cost-sharing costs."

At a meeting with congressional leaders at the White HouseTuesday, Trump cited the fact that a major insurer was pulling out of Ohio as proof that the Affordable Care Act was failing.

But the company, Anthem, blamed its withdrawal on Trump's refusal to pay $7 billion in cost-sharing payments to insurers to reduce co-pays and deductibles for low-income Americans.

"By refusing to commit to making these payments, President Trump is undermining the stability of the marketplace and leaving insurance companies with no choice but to withdraw," said Rep. Frank Pallone Jr. (D-6th Dist.), the top Democrat on the House Energy and Commerce Committee.

"Make no mistake, President Trump is purposefully sabotaging the American health insurance markets and jeopardizing the health security of millions of Americans."