It seems that any post-election discussion of healthcare in the U.S. inevitably leads to the certainty that President Donald Trump will ask Congress to quickly repeal and replace the Affordable Care Act, better known as Obamacare. Some in Congress have suggested repealing first and then passing a replacement bill at a future date.
More than 22 million Americans, including hundreds of thousands in our home state of New York, could lose their health insurance if Obamacare is repealed without an appropriate replacement plan. Repealing without a simultaneous replacement plan will also cause severe market disruptions, because what insurance company will want to stay in a program that has been repealed?
But the consequences of repealing the ACA extend far beyond the individual insurance market. Repeal could also have enormous implications for state budgets and hospital payments. Jeopardizing any one of these important things is troublesome enough, but harming all three simultaneously would severely strain the nation's healthcare delivery system.
For states like New York that expanded Medicaid coverage (as other states red and blue alike have done), the ACA provides enhanced federal Medicaid matching rates for adults with incomes up to 138% of the federal poverty level. The Urban Institute estimates that if New York reverted to pre-ACA Medicaid eligibility levels, its Medicaid spending would increase by nearly $2 billion in 2021. That amount would spike even higher if New York chose, post-repeal, to keep its ACA expansion population covered.
Losing billions in federal healthcare funding will require hard decisions. If New York and other states make the benevolent but financially challenging choice to keep individuals covered, they may be forced to raise taxes or cut healthcare provider rates to pay for it.