Senate Healthcare Proposal Would Cost NJ Billions, Boost Uninsured, Experts Say

U.S. Senate leadership delays vote on GOP healthcare plan; Garden State advocates vow to use time to keep battling proposed legislation.

The U.S. Senate now appears unlikely to vote on the Republican healthcare reform plan this week, but opponents pledged not to slack their fight against a bill they said would cost New Jersey nearly $22 billion in federal funding over a decade — and some $60 billion during the next 20 years.

A new analysis of the proposal, introduced late last week, suggested that loss would force the Garden State to spend more than $6.2 billion by 2026 just to maintain some of the insurance gains seen in Medicaid in recent years. A more likely scenario is that 520,000 state residents will lose insurance, most of whom were enrolled recently, according to the report released Tuesday by New Jersey Policy Perspective.

“On balance, the Senate bill is definitely worse than the House bill” that passed along party lines in May, said Ray Castro, the healthcare expert with NJPP, a progressive policy analyst. “Not only for the magnitude of the cuts, but for how quickly they occur,” he said.

NJPP was joined by U.S. Sens. Bob Menendez and Cory Booker (both D-NJ) who have strongly opposed the measure, and who vowed to use the extra time to continue their battle against the Republican proposal. Their press conference came just hours after Senate Republican Leader Mitch McConnell of Kentucky announced that he would not schedule a vote on the bill before Thursday, as originally planned; numerous media outlets reported that several GOP members had declined to support the bill, called the Better Care Reconciliation Act of 2017.

“It’s a momentary pause, but I worry that some of us might think the battle is over,” Menendez said Tuesday, “and that is far from true.”

Booker agreed. “I’m fired up — and today is not a good day,” he said. “We’ve got extra days now and they are not days to rest and celebrate the Fourth of July,” Booker continued, urging others to join the fight. “This bill is craven, it is anti-American.”

Republicans in Congress, cheered on by President Donald Trump, have sought to drastically reduce public spending and overhaul how the federal government pays for healthcare, while encouraging greater market competition in an effort to curb escalating costs. Their proposals would also eliminate controversial elements of the 2010 Affordable Care Act like the financial penalty for Americans who don’t purchase health insurance and the taxes imposed on high earners, insurance companies, and medical device sales.

Too high a price

But a growing number of opponents, including most healthcare providers and advocates, have said these changes come at too high a cost under the GOP proposals. In early May, six weeks after a failed attempt to pass its own version, the U.S. House of Representatives approved the American Health Care Act. At the time, NJPPP warned that the AHCA would cut the Garden State’s Medicaid funding by 20 percent — the largest percentage reduction in the nation — and lead to nearly half a million residents losing coverage.

NJPP’s Castro predicted that the Senate proposal would be even more destructive to New Jersey’s healthcare system; unlike the House plan, which protected federal spending for those now covered under Obamacare’s Medicaid expansion — including more than 500,000 Garden State residents — the Senate version would start to reduce the ratio of federal dollars for this group within four years. By 2026, covering the difference would cost the state $4 billion annually, he warned.

As a result, Castro predicted nearly seven in 10 Medicaid expansion members in New Jersey would lose coverage. Federal subsidies provided under Obamacare to help people cover premium costs would also be eliminated, ending insurance for some 133,000 state residents who now purchase insurance through the ACA marketplace, he suggested. Another 28,000 people would likely lose coverage when their employers decide not to pay for it anymore, he said, since the GOP plan would no longer require companies to do so.

‘Middle age and middleclass’

“If you are middle age and middleclass, you should expect virtually no help with insurance under their plan,” warned Menendez, noting that the GOP proposal would permit states to let insurance companies charge more to cover older, sicker patients. “This legislation goes far beyond taking away Medicaid,” he added.

Any spike in the number of people without insurance will also cost Garden State hospitals, which are required to provide care regardless of a patient’s ability to pay — and this also impacts taxpayers. As insurance coverage expanded under Obamacare, New Jersey saved $400 million since 2015 in charity care costs, which are offset by state dollars.

“If we see a spike in the uninsured, as was previously noted, we will see a spike in charity-care costs,” predicted Betsy Ryan, president of the New Jersey Hospital Association. “And we all know that providing care in hospital emergency departments is not the optimal place to provide care.”

In addition, while both the House and Senate versions would shift from a system that pays a fixed amount of all Medicaid costs to one in which states are allotted an annual amount, based on the number of people covered, the Senate version doesn’t provide for enough annual growth in coming years, Castro predicted. The new calculations, which take effect in 2025, would impact all Medicaid members and would therefore have an outsized impact on care for seniors in nursing homes and disabled residents, he warned, since those services account for nearly two-thirds of the state’s spending.

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