Capitol Correspondence - 03.03.17

Report Warns States of Major Spending Cuts under GOP ACA Repeal Plan

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On February 26, the Associated Press reported that governors in town for a National Governors Association (NGA) meeting were presented with a report that predicts deep federal spending cuts under Affordable Care Act (ACA) plans floated by House Republicans. The report (attached below) was prepared by Avalere Health and McKinsey & Company. The report evaluates the impact of phasing out the Medicaid expansion enhanced matching funds and the restructuring of Medicaid from an open-ended entitlement program to one of per capita caps. States that expanded Medicaid would face the largest cuts, though most states would experience significant funding gaps. 
The report also noted that reducing Medicaid spending could negatively impact state economies and employment, since hospitals are often big employers in local communities. Additionally, with fewer people having health coverage, the cost of caring for uninsured individuals could steeply increase. 
Many governors met with members of the administration to discuss their vision for ACA repeal and Medicaid reform. It is expected that Congress will put out a revised ACA repeal draft bill in the very near future, which may reflect governors’ feedback. (See WICs article, “Republican Governors Discuss Views on Medicaid Reform at Meeting in DC,” February 27, 2017.)