Analysis: Latest Obamacare repeal proposal seen raising costs for sick

Analyses find latest bill would sharply cut federal health care aid

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WASHINGTON — The latest Republican proposal to repeal and replace the Affordable Care Act cuts federal health care funding while potentially increasing costs for people with pre-existing conditions, according to two independent analyses.

The bill, backed by Republican Sens. Lindsey Graham, Bill Cassidy, Dean Heller and Ron Johnson, would cut federal spending on the health care act’s expansion of coverage by about $81.6 billion through 2026, according to an analysis by consultant Manatt Health. When the bill’s caps on the broader Medicaid program are included, spending would drop by $215 billion, according to consulting firm Avalere.

The bill “redistributes money from states that expanded Medicaid to states that didn’t,” said Caroline Pearson, a senior vice president at Avalere. “It is a very clear transfer.”

The bill has given the GOP’s quest to abolish much of the Affordable Care Act — known as Obamacare — a surprising new chance, two months after the dramatic failure of other Senate Republican legislation.

But the private analyses of the impact of such massive changes are assuming outsize significance in the debate, given the Senate calendar.

The Senate GOP is trying to speed toward a vote before the expiration Sept. 30 of special budget rules that allow lawmakers to pass the bill with a simple Republican majority and no Democratic votes.

The nonpartisan Congressional Budget Office, which evaluates legislation, has said it won’t have time to evaluate the full effects of the bill before a potential vote next week. The office said it plans to publish a limited analysis early next week.

A bipartisan group of 10 governors has urged the Senate to reject the proposal, though Iowa Gov. Kim Reynolds, who is a Republican, said Tuesday she is in favor.

Only one insurer has agreed to sell individual plans statewide in Iowa next year, provided it gets a hefty rate increase.

Broadly, the bill would keep most of Obamacare’s taxes while undoing the law’s insurance expansion and redirecting the funds used to pay for it to states as block grants. That would give states broad discretion over using the money.

At least 20 million people have gained insurance coverage under Obamacare, mainly through Medicaid expansion. Critics say, among other things, that insurance rates have skyrocketed for many because the law failed to attract enough healthy clients to spread the burden.

The flexibility granted to states under the proposal could allow them to set up insurance markets where individuals who have pre-existing conditions are charged more than others, according to the Manatt analysis. States also could potentially remove other pieces of current regulations, including requirements to cover prescription drugs, hospitalization and maternity care.

“In states that obtain waivers, individuals with pre-existing conditions could face substantially higher premiums in the individual and small group markets, or find their policies do not cover essential services,” the Manatt analysis said.

Because the bill depends on states to implement it, the exact effects are impossible to estimate. Neither of the consultant reports, for instance, said how many could lose coverage.

Manatt said that over the 2020-2026 period, when the bill is designed to be in effect, 29 states would receive less federal funding than under Obamacare, with an average cut of 19 percent.

The funding ends after 2026, creating a severe drop-off, though supporters of the law say it would be reauthorized.

According to the Avalere study, Iowa would see only a small funding loss between 2020 and 2026 — about 1 percent. But if the law were not reauthorized, Iowa would lose $28 billion by 2036, it found.

Appearing at a forum Wednesday, former President Barack Obama said attempts to repeal his signature health care law could end up “inflicting real human suffering.”

“It wasn’t perfect, but it was better,” he said of Obamacare. “And so when I see people trying to undo that hard-won progress, for the 50th or 60th time, with bills that would raise costs or reduce coverage, or roll back protections for older Americans, people with pre-existing conditions, the cancer survivor, the expectant mom, or the child with autism, or asthma, for whom coverage will once again will be unattainable, it is aggravating.”

Bloomberg and the Washington Post contributed to this report.

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