Op-Ed: Leaked ACA Repeal Plan Is Radical and Dangerous

By Dustin Pugel
March 3, 2017

This column originally ran on Insider Louisville on March 3, 2017.

The fate of health care in Kentucky lies with what Congress does around Medicaid and the Affordable Care Act (ACA). Full repeal of the health reform law would cause the number of uninsured Kentuckians to triple according to the nonpartisan Urban Institute, dramatically increase uncompensated care costs at hospitals and lead the individual market for health insurance to collapse.

Republicans in the House say they will try to push new legislation very soon, possibly even next week. A leaked draft shows its provisions fall far short of repairing the damage repeal would do in Kentucky. In the case of Medicaid, it would mean not only an end to the ACA’s Medicaid expansion but jeopardized coverage for all 1.3 million of the state’s Medicaid beneficiaries — including seniors, people with disabilities and children.

The leaked draft shows a plan to use ACA repeal to radically restructure and cut Medicaid funding and coverage. Their proposal would convert the program to a per capita cap or block grant — ending Medicaid as we know it, and shifting huge costs to Kentucky’s state budget.

Capping federal funding for Medicaid would mean far less money for Kentucky over time. The state would then have to decide who would lose coverage and how to ration care among the families, seniors and people with disabilities now covered by Medicaid. That would hurt Kentuckians’ health and increase uncompensated care costs for our communities’ hospitals – putting thousands of jobs at risk.

Medicaid would no longer be flexible for when problems arise. Today, federal funding increases when needs arise, whether due to a public health crisis or a new but expensive prescription drug coming onto the market. Under a cap, Kentucky would be on its own to bear all of those additional costs. For example, federal funding wouldn’t have increased in response to Kentucky’s opioid crisis.

And these coverage reductions and limits are all to pay for tax cuts for the wealthy. The House plan relies on Medicaid cuts to finance hundreds of billions in tax cuts for high-income households, drug companies, insurers and other large corporations: its math doesn’t work unless cuts to Medicaid help foot the bill.

These harmful consequences are why the AARP, Republican and Democratic governors across the country and the American Hospital Association have all warned against capping Medicaid.

The House plan would also make it virtually impossible for Kentucky to maintain its Medicaid expansion. The House is apparently proposing to end the ACA’s enhanced federal funding for Medicaid expansion for new (or returning) enrollees after two years. That means as current enrollees are cycled off, Kentucky would have to pay three times the current cost to enroll new or returning people, something our state lawmakers are likely unwilling to pay for.  

Whether a state ends expansion immediately or ends coverage for new enrollees in a few years, the final result is the same. Over 400,000 Kentuckians would ultimately lose access to health insurance, tens of thousands of people would no longer get treatment for opioid addiction or other substance use disorders and hospitals would see their uncompensated care costs skyrocket back up to pre-ACA levels, which were $2 billion more than they are today.

Kentucky’s congressional delegation holds major responsibility in the outcome of this debate, and have an obligation to do the right thing given how important Medicaid and the ACA have been to Kentucky’s health and economy. Senator McConnell and other members of our delegation should not support the House approach — or any other approach that increases Kentucky’s uninsured rate and caps and cuts Kentucky’s vital Medicaid program.