A GOP-proposal to shift health-care costs to the states has many governors worried that the plan would create a financial squeeze on their budgets.

Now, municipal bondholders can share those concerns.

The Republican-proposed bill to replace Obamacare would hurt the credit ratings for U.S. states, according to Moody's Investors Service, because it would shift a greater share of the cost of Medicaid to the states.

That could raise borrowing costs for states and lower the value of bonds already held by investors.

The joint state-federal Medicaid program for low-income households grew rapidly under the six-year-old Affordable Care Act (ACA), better known as Obamacare, and has been consuming a larger share of many state budgets every year.

It's far from clear that the Republicans' proposed replacement, known as the American Health Care Act, will survive in its current form. The proposal has already drawn criticism from both the conservative and moderate wings of the GOP.

States currently run the Medicaid program and pay part of the cost; Washington pays the rest based on a formula that varies from state to state, no matter how much the program costs. The new proposal would replace those reimbursements with a fixed payment.

That would leave the states on the hook for extended coverage or rising costs beyond those capped federal contributions. The change would create a greater financial burden on states, Moody's reported.

The proposal would also phase out funding for expanded Medicaid by 2020, leaving states to pick up the difference or to drop enrollees from their Medicaid programs.

It's also not clear just how hard the proposed formula would hit state budgets. The nonpartisan Congressional Budget Office (CBO) estimated the proposed health-care law would cut federal spending by $880 billion between 2017 and 2026, when spending would fall by 25 percent compared to current-law projections.

"States will face difficult decisions in this regard," Moody's reported on Friday. "If states maintain the expansion programs for non-elderly adults with incomes up to 138 percent of the federal poverty level, they will be on the hook for a larger portion of expenses related to new enrollees."

State Medicaid spending has been growing steadily, placing a financial strain on state budgets and forcing tax hikes or spending cuts to make up the difference. The state share of Medicaid spending is expected to grow to 28 percent of tax revenue by 2025, up from 24.5 percent in 2017, Moody's estimated.