Lindy Washburn

Staff Writer, @LindyWa

If President-elect Donald Trump and the Republican Congress carry out their promise to repeal the Affordable Care Act, the loss of federal Medicaid funding could mean a loss of health coverage for more than 500,000 New Jersey residents.

The consequences for those individuals — as well as for hospitals and the state’s economy — would be devastating, a report by a progressive Trenton think tank warned Monday.

More than twice as many state residents gained coverage through Governor Christie’s decision to expand Medicaid’s eligibility guidelines as did through healthcare.gov, the federal marketplace that provides subsidies to purchase insurance. Both are parts of the Affordable Care Act, but the marketplace got most of the attention, because of rising premiums and a drop in the number of insurers offering coverage. Medicaid, on the other hand, has appeared to work as intended. Many new Medicaid beneficiaries previously were uninsured. Because their income is so low, they have no other options for affordable health coverage.

Few details of what Trump and the Republican Congress plan to do about the health care law have emerged. But repealing key aspects of the law, without having clear plans to replace it, is a cause for concern, U.S. Rep. Frank Pallone, a Democrat from Long Branch, said Monday.

“The people who have [enrolled in] expanded Medicaid will no longer have any kind of coverage,” if federal funding to expand Medicaid is eliminated, Pallone said. “They will just have to go back to the emergency room again, and, of course, the hospitals are not prepared for that.”

Many voters who elected Trump didn’t realize that a Republican administration determined to “repeal and replace” President Obama’s signature health care law would personally affect them, said Pallone. “I think people would be tremendously surprised and upset if they start losing health coverage,” he said.

Vows to act quickly

When Congress convenes in January, its leaders have vowed to take action on the Affordable Care Act quickly. The appropriation of funds for Medicaid and premium subsidies would require only a 51-vote majority as part of the budget process. Other provisions of the law, such as its ban on coverage exclusions for pre-existing conditions, or allowing children to stay on their parents’ health policies until age 26, would require 60 votes to change. Trump has said in interviews that he would like to keep those provisions.

Some Republicans have opposed Medicaid expansion on ideological grounds, viewing it as a new federal entitlement that provides free insurance to able-bodied, working-age individuals simply because they cannot afford it.

The Record: Expanding Medicaid

In a recent report on the “enrollment explosion,” the Foundation for Government Accountability said Medicaid expansion takes “limited taxpayer resources away from the truly needy and other care priorities, including education, public safety and infrastructure.” The conservative group, based in Florida, focuses on health care and welfare policy.

States, rather than the federal government, should decide whether and how to meet the health needs of those individuals, some Republicans argue, recommending that Medicaid be funded through block grants to the states or per-capita caps on spending that would limit the federal government’s liability.

But 10 Republican governors, including Christie and Mike Pence, the Indiana governor elected vice president, have taken a pragmatic approach. When the U.S. Supreme Court left it up to the states to decide whether to expand Medicaid guidelines to include childless adults up to 138 percent of the federal poverty rate, they saw an opportunity to draw more federal dollars to their states.

Enrollment soared, far exceeding expectations. In New Jersey, Medicaid enrollment has grown by 480,000 since 2014. Over the last three years, the state saved $1 billion. State funding for hospital charity care was halved, as hospitals saw fewer uninsured patients. Credit ratings for several non-profit hospitals, including St. Joseph’s Healthcare System in Paterson, improved. Some 24,000 health jobs were added to the state economy.

Christie defended his decision as recently as August. "There were many naysayers, both inside the state and around the country, who criticized that choice," Christie said. "They were wrong then, and they're proven wrong now." He said the expansion is saving the state money, and “was the right decision for New Jersey.”

The expansion was completely funded by the federal government for the first three years, but will require states to pick up 5 percent of the costs in 2017, gradually increasing to 10 percent.

Loss of coverage

If Medicaid is repealed, “10 percent of all adults in our state would lose health coverage,” said Ray Castro, senior analyst at New Jersey Policy Perspective and author of Monday’s report. “That’s pretty stunning.”

The report from the non-profit projected that a repeal of the Medicaid expansion would mean a loss of coverage for 39,600 Bergen County residents and 47,200 in Passaic County. In Paterson alone, more than one in four adults — 24,900 people — would lose coverage.

Nearly two-thirds of those who gained Medicaid coverage — and are at risk of losing it — are working, or live in households where someone works, the report said. They typically work for restaurants, schools or daycare centers, in construction, or in home-health services.

Medicaid’s benefits, under the Affordable Care Act, include substance-abuse and behavioral-health treatment, as well as preventive care. These services have helped to keep people out of emergency rooms and saved money by providing help before emergencies arise.

Hospitals accepted reduced reimbursement for Medicare, the insurance program for the elderly, as part of the grand bargain that led to enactment of the health care law. They did so expecting to see fewer uninsured patients, as Medicaid covered more people. If funding to expand Medicaid is cut, they will take a double financial hit, said Neil Eicher, a vice president of the New Jersey Hospital Association.

“Quite frankly, some hospitals might not survive,” he said.

Email: washburn@northjersey.com