The Congressional Budget Office, Congress’ nonpartisan scorekeeper, released its assessment of the proposed American Health Care Act on Monday. It estimates the plan will result in 24 million fewer people with health insurance by 2026 while slashing $880 billion in federal Medicaid payments to states over the next decade. Vox’s Dylan Matthews writes that the AHCA amounts to a massive tax cut for wealthy Americans, and a devastating coverage cut for millions of low-income and middle-class families who have gained health security in recent years.
The Republican plan kills this expansion. It denies federal funding for any further enrollment in the Medicaid expansion, and ensures that funding will be cut off for current beneficiaries if they lose eligibility for two or more months. Since the vast majority of Medicaid expansion beneficiaries are only on the program temporarily, or cycle in and out of it, that means the expansion will gradually die as its beneficiaries cycle out and lose eligibility. All the coverage gains from Obamacare are, with time, wiped out.
Louisiana depends on federal Medicaid dollars to finance health care that more than 1.6 million state residents depend on. The Center on Budget and Policy Priorities’ Edwin Park has more:
Federal Medicaid spending would be cut by $880 billion or 17.6 percent over the next ten years, relative to current law, due to the reduction in federal funding for the Medicaid expansion and conversion of Medicaid to a per capita cap. By 2026, the annual cut in federal spending would rise to $155 billion, a reduction of 24.8 percent, relative to current law. As a result, the number of Medicaid beneficiaries would fall by 14 million in 2026. Most of those losing Medicaid would likely end up uninsured.
And while average premiums in the individual market are projected to decline 10 percent by 2026 under the AHCA, this is largely attributable to many older Americans no longer being insured. While premiums may be down, out-of-pocket costs for most will increase since the plan includes pared back tax credits. CBPP’s Jacob Leibenluft explains:
In fact, CBO and the Joint Committee on Taxation (JCT) “estimate that the average subsidy [for subsidized enrollees] under the legislation would be by 2026 about 50 percent of the average subsidy under current law.” That means consumers will pay a considerably greater share of total premium costs than under current law — so even if average premiums fall, what many people actually pay will rise.
The Associated Press reports that U.S. Senator Bill Cassidy of Louisiana is voicing concern:
“It’s awful. It has to be a concern,” Sen. Bill Cassidy, R-La., said of the budget office findings. “President Trump said he wanted as many people covered as under Obamacare.”
LBP breaks down FY18 budget proposal
Gov. John Bel Edwards recently released his executive budget proposal, putting in motion the process of setting spending priorities for the upcoming fiscal year. In a recent blog post, LBP’s Nick Albares digs into state spending trends over time, what’s funded in the budget along with a look at discretionary and non-discretionary spending:
Although Louisiana is expecting a slight revenue uptick next year, state tax collections continue to lag far behind the levels seen before 2009, when the Great Recession and two major income-tax cuts helped destabilize the state tax structure. After adjusting for inflation, the state’s general fund – which finances K-12 schools, universities, healthcare and other services – is down 21 percent since the 2008 fiscal year. This reality, coupled with data showing state revenues well below their historic share of the state economy – by multiple measures (see Appendix) – should put to rest any notion that spending is “out of control.”
Crafting a fair, adequate and sustainable state tax structure is the key to creating fiscal stability. Read more at www.investlouisiana.org.
Discretionary federal grants vital
Federal grants comprise about one-third of the average state budget (43 percent in Louisiana), funding vital programs in health care and transportation. These grants are at serious risk of being diminished or eliminated by budget-cutting proposals emerging in Washington. State and local governments do not have the money to replace the lost revenue. That means if federal aid is rescinded, the state will be forced to make difficult cuts to programs that support families, seniors, and people with disabilities. Iris Lav and Michael Leachman at the Center on Budget and Policy Priorities have more:
President Trump’s forthcoming budget may include a reported $54 billion cut in non-defense discretionary spending as a way to pay for an equivalent increase in defense spending. And the House Budget Committee-approved 2017 budget would have slashed non-defense discretionary programs over ten years by roughly $1 trillion below the already austere levels set by the BCA (Budget Control Act) and sequestration. These or similar plans would cut discretionary grants to state and local governments far below previous record lows and imperil the programs and services these grants fund, with the effects falling heavily on vulnerable individuals and families.
School infrastructure key to competitiveness
Attracting industry and growing an energetic workforce in Louisiana depends on fundamental public investments. The Advocate editorial board sat down with Jason El Koubi of One Acadiana, the Lafayette-area chamber of commerce, who echoed the idea that you cannot have booming industry and growth without a sound civic foundation and up to date infrastructure.
Unless the fundamentals of community life are sound — public safety, infrastructure, and yes, public schools — Louisiana will continue to struggle in growing jobs. Simply put, we can’t bribe businesses into staying or relocating here if our civic house isn’t in order. … When out-of-town businesses inquire about locating in the Lafayette area, said El Koubi, the “first question and the last question is typically about schools.”
Number of the Day
$2.4 billion– Total federal discretionary grant funding that Louisiana received in 2016. (Source: Center on Budget and Policy Priorities)