Obamacare Replacement Would Cost Florida $9.7B Over 6 Years

Sep 26, 2017
Originally published on September 26, 2017 10:21 am

A proposal to replace the Affordable Care Act would cost Florida $9.7 billion in federal funding over six years, according to a study from the Kaiser Family Foundation.

The Graham-Cassidy legislation, named for Republican Senators Lindsay Graham, of South Carolina, and Bill Cassidy, of Louisiana, now has little chance of passing after a third senator came out against it on Monday. But the study shows how costly changes to Obamacare could be for Florida.

More than $7.5 billion of that funding loss would come from a change in the way money is distributed to cover individual health insurance plans under the proposed legislation.

Money for tax subsidies and other cost reductions that Floridians receive under Obamacare would be lumped together with funding that is now given to states that expanded Medicaid. That pot of money would be redistributed to states based on a formula that initially reflects the funding states currently receive for Obamacare and Medicaid expansion.

However, over time, the funding will be redistributed to states with lower enrollment in Obamacare plans and poorer populations, said Rachel Garfield, a senior researcher for the Kaiser Family Foundation.

“States that had relatively high enrollment do see the funds shifted into other states under the law,” Garfield said.

In Florida, 1.4 million people enrolled in Obamacare in 2017, more than any other state. About 75 percent of those who enrolled get help paying for their deductibles and co-pays with subsidies called cost sharing reductions.

The legislation not only redistributes the money, it also cuts the total federal spending across all states between 2020 and 2026 compared to the current law, Garfield said.

The proposal’s supporters say it gives states more flexibility to meet the health care needs of their residents.

States could use the money to help people buy insurance, pay providers who serve people without insurance, fund high-risk insurance pools or stabilize premiums.

“The goal of the bill is to give the states some flexibility to maintain coverage and even expand coverage in some cases,” Garfield said. “It’s unclear how they can do that with fewer federal dollars.”

Florida would also see a $2.1 billion reduction in federal funding due to changes in the way Medicaid is distributed to states.

Instead of open-ended funding based on need, Medicaid funding would be capped at an amount per enrollee.

Medicaid helps provide health care to low income children, their parents, patients with disabilities and low-income elderly patients.

“This could have major repercussions for the ability of the state to finance health coverage for those groups,” Garfield said.

The law is still being updated, with changes made to the distribution formula on Monday morning, Garfield said.

Also, the bill contains a provision that would allow the administration to change what is allocated to states. 

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