Capitol Correspondence - 06.05.17

New Analysis Shows Medicaid Cuts Would Hurt States’ Credit

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A new analysis by Moody’s predicts that if Medicaid is cut in excess of $800 billion as is sought by the American Health Care Act (AHCA) and President Trump’s budget proposal, not only would millions of Americans lose health care, it would deal a significant blow to states’ credit, impacting their ability to secure funding for non-profits hospitals and other providers. The Affordable Care Act (ACA) has resulted in a net decline of 15% to 20% in bad debt expense since 2014, due to the expanded Medicaid population, according to the report. If 23 million people who are currently covered through private insurance or Medicaid lose that coverage, as estimate by the most recent Congressional Budget Office (CBO) analysis, the Moody’s report says, “That would be a credit negative for not-for-profit hospitals because they would increase their bad debt and uncompensated care costs.” 
Changes to other safety net programs, such as the Supplemental Nutrition Assistance Program (SNAP), would further weaken states’ ability to administer programs at current levels.