GOP health plan could cost Minnesota billions

Published 10:59 am Friday, March 3, 2017

ST. PAUL — Minnesota officials are bracing for billions of dollars in additional health care expenses if congressional Republicans enact a plan they’re discussing to replace the Affordable Care Act, according to a draft document obtained by The Associated Press.

The planning document shows that the GOP proposal, a draft of which was circulated last week, would cut $1.3 billion next year from the state’s low-income health care program that covers roughly one-sixth of its 5.5 million residents. By 2021, the losses would accumulate to more than $5 billion, eventually costing the state $6 billion a year starting in 2029. That analysis was prepared by the state’s Department of Human Services, which runs those programs.

It illustrates the uncertainty states across the nation are grappling with over how President Donald Trump and Congress will reshape the health care law championed by President Barack Obama. And it provides one of the first concrete estimates of what the emerging GOP plan would cost a state that expanded Medicaid.

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Some states fear that the final product will force states to choose between cutting popular health care programs for low-income residents or picking up far more of the tab. Democratic and Republican governors alike have expressed alarm about potential changes to Medicaid as members of Congress have faced backlash at town halls in their home districts.

The possibility that Minnesota could be on the hook for more federal costs is weighing heavily on some state lawmakers as they start assembling a new, two-year budget. If the Medicaid changes were passed, a top Minnesota Democrat said it would undoubtedly trigger cuts to critical coverage for elderly and sick residents.

“We’re making promises we’re not going to be able to keep,” state Sen. Tony Lourey said Thursday.

Minnesota is one of 31 states — plus the District of Columbia — that participated in Medicaid expansion, a marquee part of Obama’s health care law that helped expand coverage to an additional 10 million low-income residents.

The draft legislation would end that expansion and reduce overall spending by providing states with a fixed, annual amount per recipient in response to Republican criticism that states currently have little incentive to keep expenses under control. Minnesota Department of Human Services Commissioner Emily Piper said that was a grave mistake, calling it “code for cuts to programs for the poor, elderly, and people with disabilities.”

The financial hit that states may face varies drastically based on how many residents are covered on Medicaid and to what extent the federal government currently covers those costs. In a letter last week, a group of seven Republican governors urged Trump and Congress not to shift the financial burden to states.

“We must ensure that people do not have the rug pulled out from under them and are not left without access to care, especially during the transition,” according to a copy of the letter obtained by the AP.

Minnesota and many other states covered many low-income residents before the health care overhaul, but the Medicaid expansion sent out more federal dollars and covered more people. To shift that funding back, Lynn Blewett of State Health Access Data Assistance Center at the University of Minnesota said, is “going to be very hard to go backward and get to where we were before the ACA.”

The Medicaid change is just one of many pieces of the evolving GOP plan to replace Obamacare. Their proposals also call to eliminate the mandate that every American buy health insurance and scrap fines on individual who don’t have coverage while maintaining some of the law’s most popular components, including a requirement that insurers allow young adults to remain on parental coverage until they turn 26.

According to the planning document, the changes could entirely eliminate Minnesota’s so-called Basic Health Plan, a supplemental program called MinnesotaCare that covers nearly 100,000 “working poor” residents. Only Minnesota and New York have implemented those plans, and coverage in both has soared since the health care law was implemented.

The potential funding loss adds to turmoil in Minnesota’s health care system. Lawmakers took an extraordinary measure earlier this year to offset massive premium increases for shoppers buying coverage on their own, tapping $312 million of rainy day funds to help keep down monthly rates.

Democratic Gov. Mark Dayton said this week that he wants to wait and see how the federal government proceeds on health care.

“To try to anticipate what they’re going to do when they don’t know themselves … is really impossible,” he said.