WASHINGTON – Governmental groups and health care providers strongly oppose The American Health Care Act passed by the House on Thursday and are vowing to fight to get the Senate to scrap or significantly change it,
“Patient groups, healthcare providers, and voters in blue states, red states, and purple states alike have already spoken out repeatedly against this cruel and dangerous legislation. But the House of Representatives and the Trump administration chose to ignore their pleas," Lee Saunders, president of the American Federation of State, County and Municipal Employees, said in a release. "It now falls to the U.S. Senate to finally listen to the American people and stop this bill in its tracks.”
The AHCA, approved by a vote of 217-213 in the House on Thursday, would fundamentally restructure the Medicaid program and expose state and local governments to increasing fiscal strain, according to Fitch Ratings analysts and governmental groups. It would eliminate health care coverage for 24 million Americans over the next decade, with the increased numbers of uninsured putting pressure on health care and social programs in states and localities.
But the House bill, which did not receive a single vote from a Democrat and was opposed by 20 Republicans, is expected to have a tough time in the Senate where it could face substantial changes.
The U.S. Conference of Mayors said in a release that they strongly oppose the House bill. "This bill puts millions of people in our cities in jeopardy and on behalf of the nation’s mayors, we will now work with the Senate to make sure Americans have access to affordable health coverage,” said Tom Cochran, USCM CEO and executive director.
New York City Mayor Bill de Blasio, a member of the group, was even harsher in his remarks and warned House members that there will be consequences to their action. “After seven years of complaining, the president and his friends in the House have made Trumpcare even deadlier by effectively tossing out coverage for pre-existing conditions. Eliminating health care for 24 million people to make insurance companies richer and cut taxes for millionaires wasn’t enough: Republicans had to subject the one in two Americans who have pre-existing conditions to losing their healthcare," said de Blasio. "We’re not going to stand for it. Mayors across the country are organizing and we’ll take this fight to the Senate, where we have strong allies in Senators Schumer and Gillibrand. To House members who voted for this monstrosity, we’ll see you in 2018.”
Senate Finance Committee chair Sen. Orrin Hatch, R-Utah, recognized the difficulty the Senate will have in considering the House bill, saying in a release, “We will be working to put together a package that reflects our member’s priorities with the explicit goal of getting 51 votes. Coupled with the constraints imposed by the budget reconciliation process, we must manage expectations and remain focused on the art of the doable as we move forward.”
The president lauded the legislation during a press conference after the vote, saying the AHCA is “a great plan.” He added, "We’re going to get this finished.” and said that he is confident that the bill will be approved by the Senate and “will get even better.”
But the National League of Cities said, "the bill is expected to increase the number of uninsured Americans, remove key protections and ultimately shift financial burdens of uncompensated care onto states and local governments."
“When the federal government pulls back on its commitment to health care, local governments, states and health care providers are left to pay the bills of increasing rates of unreimbursed care," said Matt Zone, NLC president and a councilman in Cleveland. "We urge the Senate to stand with cities and American families and scrap this flawed piece of legislation."
House Democratic Leader Nancy Pelosi said Democrats will continue to oppose the bill. “As the bill moves to the Senate, Democrats in Congress and across the country will continue to fight with all our strength to protect seniors and hard-working families from the moral monstrosity of Trumpcare,” she said in a release.
One of the biggest impacts on state and local governments comes from the AHCA’s proposed restructuring of the 50-year old Medicaid program, going from an open-ended entitlement program to a per capita system, with an option for states to alternatively receive block grants. As a result, states would wind up with major reductions in federal funding for Medicaid, a program that currently accounts for about one third of their budgets.
As states are forced to increase their Medicaid contributions to make up for less federal funding, there would be, “negative implications for entities that rely on state support, including school districts, cities, counties, and public higher education institutions could be more significant given their generally more constrained budgetary flexibility,” Fitch Ratings said in a report released Thursday.
Many local governments will also feel the fiscal pain. “There are a number of states where local governments contribute, in addition to their states, to Medicaid,” said Eric Kim, a director at Fitch.
According to the National Association of Counties, counties in 26 states make contributions to Medicaid and 18 of those are required to contribute. “In those states that are receiving less federal funding and have to increase their own contributions, local governments will face that pressure as well,” said Kim.
“When states face pressures on their budgets, other programs will be hurt as well,” said Kim. In most states Medicaid and education are the top two areas of spending. “K-12 and higher education could be particularly at risk,” said Kim.
The final House AHCA was amended to include a Medicaid block grant option that would allow states to convert Medicaid funding under the per capita system to a block grant program. “While the block grant option appears to offer states considerable flexibility by eliminating many mandated services and population coverage requirements, it also limits annual growth in federal funding to the consumer price index (CPI), rather than the normally higher CPI-M provided in the per-capita cap system,” Fitch said in its release.
NACo said in a release that it is concerned the bill "could erode the federal-state-local partnership for Medicaid and result in local taxpayers picking up the tab for additional uncompensated care.”
"Structural changes to the nation’s healthcare system, particularly to Medicaid ... could unintentionally shift federal and state costs to counties. Such changes could create a more challenging dynamic at the local level because 42 states impose limitations on counties’ ability to raise property tax rates and assessments, typically the primary source of revenue source for counties," the group said, adding that counties are just coming back from the Great Recession and that "many smaller counties – mainly in Southern states – having yet to reach pre-recession conditions."
Standard & Poor's said in a report that the bill could hurt health care providers as well.
"The proposed change in Medicaid funding for the expansion population will ultimately reduce the number of enrollees in the Medicaid programs over time," said S&P Global Ratings credit analyst Deep Banerjee. "It allows new enrollees to join the expansion ranks until Dec. 31, 2019. But after 2019, it doesn't provide federal funding for any new eligible enrollees that aren't already enrolled, or for any current enrollee that has more than a month's break in eligibility. This effectively puts Medicaid expansion in run-off after 2019," the analyst said.
"We believe this will likely force some states either to reduce Medicaid eligibility levels or cut reimbursements to providers to offset the growing burden on state budgets," S&P concluded in its report.
The AARP and many consumer and health care groups also oppose the house bill.
