California Says GOP Health Bill Would Cost State Billions
Wednesday, March 22, 2017
Credit: Associated Press
The Republican health overhaul bill in Congress would cut federal payments for low-income health coverage in California by an estimated $6 billion in 2020 and more than $24 billion in a decade, Gov. Jerry Brown's administration said Wednesday.
In their first detailed analysis of the bill's impacts on Medi-Cal, state officials said lawmakers would eventually have to decide whether to spend additional money on the program that provides health coverage for the poor. They may have to cut costs by covering fewer people, reducing their benefits or paying less to doctors and hospitals.
"Those are very real...fiscal and policy questions that will have to be confronted if this measure were to pass Congress and be signed into law in its current form," said H.D. Palmer, spokesman for the Department of Finance.
Officials released the analysis a day before the U.S. House is scheduled to vote on the GOP proposal to repeal elements of former President Barack Obama's Affordable Care Act. Brown, a Democrat, is in Washington this week for meetings with members of Congress and officials from President Donald Trump's administration.
"This is a dangerous bill," Brown told reporters on Capitol Hill. "It's written by people who don't know what the hell they're talking about."
The state general fund would bear the majority of costs — $4.3 billion in 2020 and nearly $19 billion in 2027, according to the administration's analysis. The rest would be the responsibility of counties, health care districts, managed care plans, hospitals and nursing homes, officials said.
Republicans say Obama's health law has led to higher costs and excessive mandated coverage, particularly for people who buy their own health plan rather than getting coverage through an employer or the government. They say their plan would increase subsidies for some health insurance customers, while Democrats point to a Congressional Budget Office report that says the proposal would cost 24 million people their coverage in a decade and drive up costs for many others.
The bill would overhaul the funding mechanism for Medicaid, the health insurance plan for the poor known in California as Medi-Cal. Instead of a guarantee that the federal government would pay a percentage of all costs, Congress would provide a specific amount of money for each enrollee, leaving the state responsible for higher costs.
State officials say California's medical costs grow faster than the federal payments would, so the price tag for the state would increase over time.
For most Medi-Cal enrollees, the federal government and the state share equally in the costs. But for about 4 million people who became eligible for Medi-Cal under Obama's health law, the federal government covers 90 percent or more of costs.
The GOP bill would require the state to transition people to the less generous program, shifting billions of dollars in costs to the state, said Jennifer Kent, director of the Department of Health Care Services.
To view PDF documents, Download Acrobat Reader.