GOP and Dem Governors Are Closing Ranks Against Obamacare Repeal
Obamacare Diary

GOP and Dem Governors Are Closing Ranks Against Obamacare Repeal

REUTERS/Jessica Rinaldi

Republican and Democratic governors rarely see eye to eye, especially when it comes to spending on big ticket items like food stamps, unemployment insurance and other social services.

But as the Senate Finance Committee prepares for a roundtable discussion with GOP governors next month to discuss the impact of a repeal of the Affordable Care Act and expanded Medicaid coverage, governors from both parties are warning of potentially disastrous consequences for state budgets if GOP leaders make good on their pledge to repeal Obamacare.

Related: Some GOP Governors Flip for Medicaid Funds -- on Their Terms

Nearly half of the 31 states and the District of Columbia that agreed to expand their Medicaid coverage under Obamacare are controlled by Republicans – including Vice President-elect Mike Pence’s home state of Indiana. Since the Nov. 8 election, Republican governors such as Susana Martinez of New Mexico have voiced alarm over possibly losing millions in federal funding to provide Medicaid and Children’s Health Insurance coverage for seven million people.

On Wednesday, the Democratic governors sent a letter to House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY) and other GOP congressional leaders warning that repeal of Obamacare would strip tens of millions of their health coverage and shift enormous health care costs to states governments – effectively “blowing a hole” in state budgets.

Regardless of mounting warnings from state chief executives across the country, President-elect Donald Trump, and Republican lawmakers are almost certain to make good on their pledge to repeal Obamacare as early as next month -- but without adopting a suitable replacement for at least another two or three years.

AshLee Strong, a spokesperson for Ryan, told The New York Times, “This disaster of a law has led to massive premium spikes, less choice for patients and a collapse of the exchange markets, and no amount of spinning from the White House can hide this ugly reality.”

Some 24 million Americans potentially could be removed from the health care insurance rolls in 2021 if the GOP fails to come up with an effective alternative approach. And federal spending on health care would decline by $927 billion over the next decade, leaving it up to the states to pick up much of the slack, according to a recent study by the Urban Institute and the Robert Wood Johnson Foundation.

Related: Nearly Half of Obamacare Co-Ops Are Closing

One of the ironies of all of this is that while Obamacare has had an extraordinarily rocky existence from the beginning – including court challenges, internet launch woes, financial problems, mass defections by the insurance industry, and soaring premiums – enrollments for the upcoming 2017 season are moving apace at a record clip.

About 6.4 million Americans have signed up so far for health insurance as of Wednesday, according to the Obama administration, an increase of about 400,000 over a similar point a year ago. The administration and its Democratic allies on Capitol Hill and in statehouses across the country are stepping up a campaign to try to salvage critical pieces of Obamacare, including expanded Medicaid, and the latest enrollment figures are a heartening sign to them.

Of course, signing up is the first step. The real test is how many people will pay their first-month premium and stay with the plan for a year, especially when they see that premiums have risen an average 25 percent from last year and deductibles are also high.

Sylvia Mathews Burwell, the secretary of health and human services, told Times reporters Wednesday that the number of Obamacare signups was remarkable in light of “headwinds” created by the premium increases and the uncertainty over the future of the program.

It wasn’t that long ago that most state and local governments were still struggling to recover from the worst effects of the Great Recession, with many forced to cut back on services, raise taxes and shortchange their public employees’ retirement and health care funds.

House Democratic Leader Nancy Pelosi of California sent a letter this week urging her colleagues to stage events in early January to showcase Democratic support for Obamacare and Medicare, according to Morning Consult. She said the events should “highlight the risks of repeal of the ACA and ending the Medicare guarantee.”

Related: States Face a $1 Trillion Pension Problem: Here Are the Worst 10

Even now, many state and local governments are unable to return to spending and personnel levels enjoyed before the economic crisis dating back to 2007 and 2008. State-run retirement systems reported shortfalls totaling $934 billion in fiscal 2014, the latest figures available, which was a slight improvement over the $969 billion deficit from the previous year, according to research by the Pew Charitable Trust.

However, if the federal government no longer picks up the majority of expanded Medicaid coverage for poor adults in 31 states as it now does under the ACA -- most of those states would suffer massive budgetary losses to provide the health care services people now expect.  

The Democratic Governors Association estimated that states could face nearly $69 billion in costs for uncompensated care over the coming decade if Obamacare is repealed.

Related: States Keep Using Gimmicks to ‘Balance’ Their Budgets   

“This plan appears to be nothing more than a Washington, D.C. bait-and-switch that puts an untenable burden on the states,” Democratic Governors Dan Malloy of Connecticut, Jay Inslee of Washington, and Andrew Cuomo of New York wrote in the letter. “The American public has yet to see any alternative that retains coverage and financial protections for the millions of consumers currently benefitting from the ACA.”

They noted that nearly a third of those covered under the Medicaid expansion have a mental health or substance abuse disorder – an important point to make amid the nation’s shocking opioid and heroin epidemic that has claimed more than 33,000 lives in 2015 alone.

“Your plan would send us back to a time when those who were sick were left uninsured or relegated to state high-risk pools with exorbitant premiums, inadequate coverage, and waiting lists,” the Democratic governors complained.