Bipartisan Governors’ Health Priorities Conflict with GOP Bill’s Key Provisions

WASHINGTON, June 20 -- The Center on Budget & Policy Priorities issued the following news release:

The National Governors Association (NGA)'s Health Reform Learning Network issued its shared priorities for health reform legislation today, and they sharply conflict with core features of the House-passed health bill to repeal the Affordable Care Act (ACA) - features apparently built into the emerging Senate health bill as well.

The NGA Network, a bipartisan working group focusing on federal health reforms, includes 13 governors: Republicans Matt Bevin (Kentucky), Dennis Daugaard (South Dakota), Bill Haslam (Tennessee), Gary Richard Herbert (Utah), Phil Scott (Vermont), and Matthew Mead (Wyoming) and Democrats Jerry Brown (California), John Carney (Delaware), Mark Dayton (Minnesota), Steve Bullock (Montana), Tom Wolfe (Pennsylvania), Terry McAuliffe (Virginia), and Jay Inslee (Washington).

The governors stress their opposition to federal Medicaid cuts and cost shifts to states, call for maintaining current federal funding for the ACA's Medicaid expansion, and emphasize that tax credits that help people afford private coverage should be adequate for lower-income people and adjust for income, age, and geographic variation in costs.

Today's release follows Friday's bipartisan letter to Senate leaders from seven governors who also expressed strong concerns about the House bill and the emerging Senate version. Signed by Republicans Charlie Baker (Massachusetts), Brian Sandoval (Nevada), and John Kasich (Ohio) and Democrats John Hickenlooper (Colorado), John Bel Edwards (Louisiana), Steve Bullock (Montana), and Tom Wolfe (Pennsylvania), it condemned the House bill for "shifting significant costs to the states" and "fail[ing] to provide the necessary resources to ensure that no one is left out."

Noting that "Medicaid provisions included in this bill are particularly problematic," the governors urged Senate leaders to approach health reform on a bipartisan basis and "first and foremost ... focus on improving our nation's private health insurance system."

The new NGA Network document addresses:

* Medicaid cuts and cost shifts to states. The governors write, "Supporting vulnerable populations is a shared responsibility between the federal government and states. It is critical that Congress continue to maintain a meaningful federal role in this partnership and not shift costs to states [emphasis added]. Significant cuts to Medicaid will impact coverage for millions of low-income individuals and could impede state efforts to address the underlying factors driving health care costs, such as pharmaceuticals, long-term care and the social determinants of health."

* The House-passed health bill cuts federal Medicaid funding by $834 billion over ten years -- 24 percent by the tenth year -- by ending the ACA's enhanced federal funding for the Medicaid expansion and capping and cutting federal Medicaid funding for all beneficiaries, including seniors, people with disabilities, and families with children. The Senate is considering delaying the end of expansion funding, but the Senate bill -- like the House bill-- would cap and cut federal Medicaid funding, and its Medicaid cuts and cost shifts to states will likely be as deep or nearly as deep as the House's in the long run. In fact, the Senate bill may reportedly include even deeper long-run Medicaid cuts.

* Medicaid expansion. The governors write, "for the majority of the Network states that expanded Medicaid, maintaining coverage for those populations at the federal matching rate under current law is of critical importance [emphasis added]."

* The House-passed bill would eliminate the enhanced federal matching rate for new expansion enrollees beginning in 2020. The Senate is reportedly considering phasing down the enhanced match for new enrollees over several years, but the long-run impact would be the same: states ultimately would have to pay three to five times as much as under current law to maintain their expansions.

* Financial help for people buying individual-market coverage. The governors write, "To have adequate participation in the market, it is crucial that the coverage is affordable and that there is appropriate financial support for low-income individuals to purchase high-quality coverage. Advanceable and refundable premium tax credits should reflect income, age, and regional variation in costs with any federal legislative change. Tax credits should phase out gradually at higher income levels [emphasis added]."

* The House-passed bill would cut subsidies that help people afford individual-market coverage by about $300 billion over ten years. It would replace the ACA's premium tax credits -- which adjust for income, age, and regional variation in costs, as the governors recommend -- with flat tax credits that generally don't adjust for income or regional variation in costs and adjust less for age than the ACA credits. As a result, the House bill would dramatically increase costs for consumers who have lower incomes, are older, or live in high-cost states. While the Senate has reportedly not yet determined its approach to tax credits, anything less than restoring the ACA's premium tax credit structure and undoing the House bill's cuts would likely fail to meet the NGA Network's criteria.

Like last week's governors' letter, the new NGA document urges that "prompt federal action" focus on "achiev[ing] short-term market stability and predictability" in the private insurance market. Specifically, the governors state: "the federal government should fully fund the cost-sharing reductions (CSRs) for the remainder of CY [calendar year] 2017 and CY 2018 and offer long-term certainty about the future of CSRs." They also recommend near-term action to create a federal reinsurance program.

Today's release and Friday's letter follow other recent statements from Republican governors criticizing the House-passed health bill and raising serious concerns about both the emerging Senate bill's contents and the process by which it is being developed. For example:

* Nevada's Republican Governor Brian Sandoval called for maintaining current federal funding for the Medicaid expansion, commenting, "I think the House bill has a two-year ramp, I've heard seven [for the Senate], I've heard five. Obviously my preference is that it stay the way it is, that has always been something that I've spoken for and fought for on behalf of the newly eligible." He noted, "People are living happier and healthier lives. We've been able to dramatically increase coverage for the mentally ill, and having them have access to coverage. For the childless adults which are part of that newly eligible population, it's been transformational for them."

* Ohio's Republican Governor John Kasich urged the Senate to change its approach to developing health care legislation, saying in a statement, "As the U.S. Senate weighs changes to America's healthcare system, it's essential that they not forget our most vulnerable citizens, here in Ohio and nationwide. Meaningful and lasting change only happens through bipartisan support and that's why I'm working with governors from both sides of the aisle on solutions and encourage the Senate to do the same, with transparency so the American people can participate in this vital debate."

* Michigan's Republican Governor Rick Snyder reaffirmed the benefits of expansion and encouraged federal policymakers to take note, commenting, "People have coverage, lives have been saved, because of Healthy Michigan and we should be proud of that." He urged, "So generally I would say we need to be paying careful attention and not just passive about what's going on in Washington. Let's talk about the benefits that we've seen."

It's not surprising that governors of both parties disagree with congressional Republican plans to repeal the ACA and radically restructure and cut federal Medicaid funding. They recognize that they and their states would have to grapple with the results: hundreds of billions of dollars in lost federal funding, historic increases in uninsured rates, and setbacks to efforts to combat the opioid epidemic, expand access to preventive care, and improve health care in rural areas.

Now, the question is whether congressional Republicans -- who have so far disregarded feedback from physicians, nurses, hospitals, patient advocates, and other experts -- will change their approach in response to input from governors of their own party.