Study: Proposal To Replace Obamacare Particularly Bad For Florida

Aug 28, 2017
Originally published on August 28, 2017 8:23 am

A proposal by two senators to replace Obamacare would be particularly bad for Florida, costing the state billions of dollars over the next 10 years, a new study says.

The Cassidy-Graham plan, named after Republican Senators Bill Cassidy, of Louisiana, and Lindsay Graham, of South Carolina, would do away with tax subsidies that help people pay for insurance premiums. Instead, states would get one lump sum from the federal government that would shrink over time. That block grant would go away completely by 2026, according to a study by the Center on Budget and Policy Priorities, a left-leaning Washington-based think tank.

"So we're talking about clearly knocking off a bunch of folks from insurance because they otherwise would not be able to afford these plans," said Anne Swerlick, an analyst with the Florida Policy Institute.

The Cassidy-Graham plan would also make drastic changes to Medicaid. Medicaid expansion would go away and the federal government would redistribute the expansion funds to all states.

The funding model for Medicaid would also change. Instead of open-ended funding based on need, funding for states would be capped and based on population.

Altogether, Florida stands to lose $9.66 billion in federal funding by 2026, according to the study.

The bill would have a more significant impact in Florida and other states that lead the nation in Affordable Care Act enrollment, the study says.

In Florida, 1.7 million people enrolled in Obamacare in 2017, more than any other state. More than 80 percent of those who enrolled get help paying for their insurance through premium tax credits or cost sharing reductions, which help lower deductibles and co-pays.

“Because Florida has done such a good job of enrolling people and because there is such a huge need in Florida for that assistance, we’re one of the states that would be hardest hit,” Swerlick said.

Because Florida did not expand Medicaid, the state could see a bump in funding from the redistribution of those funds, but it would not make up for a loss in funding in other areas, she said.

“It would be a small amount relative to the other big losses that would be coming down the pike,” Swerlick said.

Supporters of the plan say it gives states more flexibility to meet the health care needs of their residents. States could use the lump sum payments to fund high-risk pools, stabilize premiums, pay health care providers and reduce out-of-pocket costs for consumers.

The plan would also save the federal government money, supporters say.

But states would have to carry a heavier burden under the plan or reduce services. The amount of money Florida gets from the federal government would be cut in half by 2026, according to the study.  

Cassidy and Graham initially introduced the legislation last month as an amendment to the Senate’s replacement for Obamacare, called the Better Care Reconciliation Act of 2017.

Though that bill failed to pass, the Cassidy-Graham plan is seen by some as a way to revive the effort to repeal and replace the Affordable Care Act.

Critics like Swerlick are skeptical about whether the bill would be properly vetted.

“It’s hard to get away from the feeling that this is once again a sneaky approach and strategy on something that has a huge impact on our economy as well as our citizens,” Swerlick said. “It’s surprising that they might try to revise this effort because it’s clear that the public and all of the critical stakeholders, providers and consumers are completely opposed to this approach.” 

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