How the GOP health bills could make N.J. look like Alabama

July 11--For New Jersey, the GOP health-care proposals in Washington could mean more than budgetary chaos and a million people going without insurance. The state could wind up with a higher share of uninsured residents than places like Alabama and Mississippi.

The main reason: New Jersey long has worked to make coverage accessible -- through both public Medicaid programs and private insurance mandates -- and it accepted a huge amount of help from the Affordable Care Act. So now, it has a great deal more to lose.

Federal funding for Medicaid and subsidized private insurance sold on the ACA exchanges in New Jersey would drop by more than half, according to Urban Institute projections of how the Senate and House proposals would affect each state in five years. The proportion of uninsured residents under age 65 in Pennsylvania, meanwhile, would triple. Yet Pennsylvania would be better off than the Garden State in some ways, losing a bit more than one-third of its funding, compared with an average loss nationally of less than a third.

In New Jersey, rates of employer-provided coverage historically have been high, largely the influence of organized labor. But state politics also have a longstanding progressive streak, producing bipartisan policies that embraced the ACA's largesse at a time when other Republican-led states shunned it.

Gov. Christie has been uncharacteristically quiet about the current health-care debate. Yet the governor, who chairs President Trump's opioid task force, has acknowledged that the Medicaid expansion targeted by the GOP triggered a five-fold increase in drug treatment for the poor. That was the sort of "opportunity" Christie envisioned in February 2013 despite his long and strenuous opposition to Obamacare.

"While we already have one of the most expansive and generous Medicaid programs in the nation," Christie told the Legislature during his annual budget address, "expanding Medicaid will ensure New Jersey taxpayers will see their dollars maximized."

And they have. Both the state and nonprofit advocacy groups vigorously enrolled residents in the expanded Medicaid program and Obamacare's subsidized private insurance marketplace, exceeding average sign-ups elsewhere. Even before that, New Jersey was one of a handful of states that had been covering childless adults and parents of children in the state Children's Health Insurance Program, sharing the costs 50-50 with the federal government. The ACA transferred nearly the full cost to the federal government, saving the state hundreds of millions of dollars that are now committed elsewhere.

All that extra money will go away if the repeal-and-replace proposals that have divided Republicans in Washington become law.

Projected Health-Care Coverage by State in 2022

New Jersey's federal funding for Medicaid and ACA exchanges could drop by more than half by 2022 if Republican health-care proposals become law. Its rate of uninsured residents under age 65, historically low, would soar.

Under the Affordable Care Act (current law)

New Jersey's uninsured rate would be 8.7 percent, below the national rate of 11.1 percent. Pennsylvania's rate would be 6.0 percent.

Under the Republican Senate plan

New Jersey's uninsured rate would climb to 22.1 percent, above the national rate of 20.1 percent. Pennsylvania's rate would be 17.8 percent.

SOURCE: Urban Institute

"The Senate bill would in almost in every state take coverage back to pre-ACA levels and in many cases there would be even more uninsured people than if the ACA had never happened," said Matthew Buettgens, a research analyst and coauthor of the Urban Institute paper. "Expansion states in particular will have to deal with a very large drop in federal Medicaid funding, and the only way you can deal with that is some combination of raising taxes, cutting enrollment, reducing benefits, and paying providers less," Buettgens said.

New Jersey already has one of the nation's lowest reimbursement rates for providers in the Medicaid program, making it impractical to cut it even more in order to economize.

And New Jersey devotes a higher proportion of its Medicaid dollars to seniors than all but two other states. Furthermore, health-care costs in New Jersey are well above average. The GOP's formula to cap annual Medicaid spending, which now grows depending on need, would hurt the state more than most others.

Also, 5.4 percent of New Jerseyans in 2014 were undocumented immigrants, according to the Pew Research Center. They are ineligible for federal health assistance and often cannot pay medical bills. But charity care was cut by the ACA and would not be restored.

Adding to all this is that the Urban Institute projects that for complex reasons, employer-based insurance will decline in some states, particularly New Jersey, if the ACA is repealed.

"When you lose [insurance], there is not that cushion to break the fall," said April Grady, a health-policy consultant at Manatt Health.

Grady's projections found that New Jersey would need $12.3 billion in state funds -- equal to 23 percent of its total spending on Medicaid -- between 2020 and 2026 -- just to maintain current levels of coverage if the Senate bill passed in its original form.

Pennsylvania would have to spend $13.7 billion, 13 percent of its current total.

The Urban Institute's analysis of the Senate bill, officially known as the Better Care Reconciliation Act (BCRA), also included the ACA's subsidized private insurance marketplaces. It projected that 1.2 million fewer Pennsylvanians under age 65 would have health insurance in 2022 than if the ACA is left in place. The uninsured rate -- 6 percent in Pennsylvania if the law is left alone --would rise to 17.8 percent.

In New Jersey, where one million more residents under 65 would go without coverage under the BCRA, the uninsured rate would rise to 22.1 percent, two points above the national average. It would be 8.7 percent -- more than two points below the U.S. average -- if the ACA remains.

Back in the mid-1990s, a bipartisan coalition in New Jersey prohibited discrimination by insurers based on preexisting conditions, foreshadowing one of Obamacare's most popular provisions. But the state did not subsidize premiums or mandate coverage, so the individual market was dominated by a less healthy population, causing prices to go up and insurance purchases to go down. Obamacare's infusion of federal funds rescued the market from that "death spiral."

"It is very hard to replace that amount of money," said Linda Schwimmer, president and CEO of the New Jersey Health Care Quality Institute, a nonprofit that promotes accessible health coverage. None of the main GOP proposals "are workable from an insurance standpoint," Schwimmer said. "They are going to lead to a lot of uninsured people."

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