Concerns come with Obamacare replacement proposal

March 08--The House Republican proposal to undo the Affordable Care Act could be costly for Pennsylvania's low-income residents, its hospitals and future state budgets, according to state officials and policy analysts combing through the document.

Among other changes, the new plan would phase out funding for a Medicaid expansion that Pennsylvania and 30 other states took advantage of under Obamacare -- adding, in Pennsylvania's case, 716,000 people to the health care roles.

The federal government now pays the bulk of the costs under a formula that will decrease to 90 percent by 2020.

Those payments would change in 2019 under the GOP plan released Monday evening. After that year, anyone newly eligible for Medicaid -- or anyone who leaves the program and returns -- would be covered by Washington at a lesser rate. That would force Pennsylvana and other states to pay more, or reduce coverage for people in the program.

The legislation also would cap what the federal government would pay for each person on Medicaid -- again leaving states to cover any costs above that level.

Congressional Democrats from Pennsylvania and elsewhere blasted that approach as they raised a range of concerns about the bill.

Conservative Republicans also voiced objections, putting the bill's future in doubt.

"What congressional Republicans have put forth is a scheme that will mean higher premiums for the middle class, massive cuts to seniors receiving nursing home care through Medicaid, and fewer Pennsylvanians covered," said U.S. Sen. Bob Casey, D-Pa.

Republican U.S. Rep. Charlie Dent -- who praised several aspects of the bill, including its repeal of a tax on medical devices -- said in a statement he is "concerned about the impact of the Medicaid changes on vulnerable populations, as well as the overall effect of the bill on access to affordable care."

U.S. Sen. Pat Toomey, R-Pa., said Tuesday he was still reviewing the House-drafted bill.

The Medicaid changes are just one part of the 66-page bill that House Republicans released as their alternative to Obamacare. Republicans from Donald Trump on down campaigned last year on repealing Obamacare, a pledge that more recently morphed into repeal and replace.

The GOP proposal also would repeal the taxes in Obamacare, undo its mandate of continuous insurance coverage (but allow for a higher premium if someone has a gap in coverage), and replace the current law's insurance subsidies with tax credits that would increase based on a person's age.

Congressional Republicans who drafted the measure argue that the Medicaid changes would give states more flexibility to manage their programs.

Officials in Democratic Gov. Tom Wolf's administration who handle health care and insurance policies described the legislation as likely to result in a "huge step backward" for health coverage.

"It would force states to slash or eliminate care," said Leesa Allen, the state Medicaid director.

Obamacare allows Pennsylvania to save $428 million in next year's budget because the federal government is paying most Medicaid costs, state Department of Human Services Secretary Ted Dallas said Tuesday.

In addition, the state's contracted managed-care organizations, which serve Medicaid recipients, use ACA rules to save $2.1 billion in prescription drug costs.

Those costs would not be affected in the state budget currently being hashed out, but would loom in 2020 under capped federal funding.

Dallas, the human services secretary, said about 60 percent of the 716,000 people who received health coverage under ACA's Medicaid expansion are working adults ages 40 and under. Many of those adults are working in the service sector -- like restaurants and hair salons -- in which business owners do not provide health insurance.

About 30,000 of the new Medicaid enrollees are disabled, and 124,000 are receiving health coverage for drug and alcohol addiction services, Dallas said.

The law also has saved Pennsylvania hospitals money, Dallas said. In Obamacare's first year, it saved hospitals a combined $92 million in uncompensated care for citizens without health insurance, he said.

Andy Carter, president and CEO of the Hospital and Healthsystem Association of Pennsylvania, said in a statement that the proposed Medicaid changes would "jeopardize coverage" for those currently in the system, and that the financial burden "is seemingly being shifted to low-income individuals."

"In addition, the plan threatens the progress hospitals have made to improve health care, as the stable and sufficient resources needed to support providers in maintaining access to care [are] jeopardized," Carter said.

U.S. Rep. Matt Cartwright, D-17th District, said he was concerned about the effect on rural hospitals if those facilities aren't able to get reimbursed through Medicaid for the low-income individuals they serve.

Local insurance brokers also expressed skepticism as to whether costs would go down for the millions who get their health coverage through an employer or one of the insurance marketplaces.

The replacement of the individual mandate to buy coverage with a 30-percent premium penalty for lapsed coverage might not be sufficient to keep enough healthy people in the marketplace, said Alexander Batista, president of the Bethlehem-based Benefit Services Group Inc.

"I'm afraid this will give a disincentive for younger, healthier people," Batista said. "They may be thinking: I don't need to do it, so I don't need to buy it."

But Michael Hitcho, owner of Hitcho Insurance in Bethlehem, a financial planner and Medicare specialist, favors the replacement of the mandate with a premium penalty. He believes the Republican plan has the potential to prompt insurance companies to act more creatively to push costs down.

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