As the Legislature’s main budget panels hold hearings over Gov. Tom Wolf’s proposed $32.3 billion spending plan, they face a financial unknown that is out of their hands:
President Donald Trump’s and Republican-controlled Congress’ intent on repealingthe Affordable Care Act, widely known as Obamacare.
The signature domestic law of President Barack Obama’s two-term tenure, the act is scheduled to provide more than $2.55 billion in federal tax money and cost savings to Pennsylvania in the state’s 2017-18 fiscal year. That money covers health insurance and lower drug prices for more low-income residents, and public health initiatives.
If the law is repealed with no backup plan, the state would have to come up with hundreds of millions of dollars more to provide health care to the poor, said Ted Dallas, secretary of the state Department of Human Services.
“There is a human being behind every one of these numbers we are talking about,” Dallas said at a news conference Wednesday in the state Capitol.
ACA is not perfect, but that does not mean the entire law needs to be scrapped, said state Insurance commissioner Teresa Miller. Congress needs to only fix the parts that are broken, such as costs associated with marketplace insurance, she said.
The news conference came a day after the state House and Senate began hearings on Democrat Wolf’s budget proposal for the fiscal year that begins July 1. The potential loss of ACA funds was mentioned several times from both Republicans and Democrats.
States may not lose all the existing funding right away under Congress’ repeal and replace plan, said Shawn Millan, spokesman for U.S. Rep. Charlie Dent, R-15th District. Congress is expected to build into a new bill a provision that allows states to keep their ACA-level funding for two years until a new law is in operation, he said.
So far, U.S. House Speaker Paul Ryan has not introduced new legislation. That means there is no guarantee states can expect to receive the same level of funding.
Obamacare, which went into effect in 2010, has different parts.
It offers government subsidies to individuals and families, depending on respective income levels, to purchase health insurance from the private marketplace. It expanded welfare rolls by raising income allowances for Medicaid, the joint federal-state insurance program. It provided more money to states for public health programs.
Nationwide, the ACA is credited with extending health insurance to 20 million people, including 1.1 million in Pennsylvania via marketplace subsidies and Medicaid expansion. In the Lehigh Valley, 33,700 residents have coverage via Medicaid expansion, state records show.
To its opponents, Obamacare’s penalty and other tax aspects amounts to government overreach, and they criticize the law is too costly to maintain.
Earlier this month, Ryan outlined a bill that retains some of ACA’s most popular requirements, including allowing children up to age 26 to stay on their parents’ health care plan and preventing insurance companies from denying coverage to people with pre-existing medical conditions. His plan would repeal the Medicaid expansion and provide Medicaid money to states in block grants. It also would repeal ACA taxes and penalties that help pay for the programming. Ryan is expected to start moving the new bill when Congress returns Feb. 27, Millan said.
For now, Wolf’s administration and lawmakers are left to wonder how the changes will impact state operations.
Prior to Wolf allowing the state to join ACA in 2015, the state solely covered the cost of providing health-care and substance-abuse coverage to poor citizens who did not qualify for Medicaid. That money came out of the Human Services’ general assistance fund.
Under ACA, the general assistance fund was replaced with Medicaid funds, most of which were provided by the federal government.
Next fiscal year, ACA-related Medicaid costs will total $626 million, with the federal government paying $426 million and the state $200 million.
If the law goes away, Dallas said, the state could not afford to offer expanded Medicaid coverage and it would revert to covering $426 million in the general-assistance fund.
In addition, Dallas said, the state’s contracted managed-care organizations, which serve Medicaid recipients, use ACA provisions to save $2.1 billion in prescription drug costs.
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