Repeal of ACA Could Hurt NJ’s Patients, Health, And Economy
If President-elect Trump follows through on his threat to abolish Obamacare, it could blow a $3B hole in the state’s budget, in the first year alone
If President-elect Donald Trump succeeds in repealing the Affordable Care Act, one in 10 adults in New Jersey would likely lose their newly acquired coverage. They also would have fewer options for obtaining another medical care plan than they had six years ago, before the law took effect.
But that is just one of several ways the demise of the ACA, the federal health insurance program otherwise known as Obamacare, would negatively impact the Garden State, according to a; the authors joined U.S. Rep. Frank Pallone (D-Long Branch), and other advocates to discuss the findings Monday.
In addition to dropping more than half a million adults from the health insurance rolls, repealing the ACA would blow a $3 billion hole in the state’s budget the first year alone; endanger the jobs of at least 24,000 healthcare workers; erode $4 billion in overall economic activity statewide; and threaten coverage for mental health, substance abuse, and dozens of preventive services for millions of residents with other insurance plans, the report suggests.
And these changes could come within months, not years, Pallone warned. Because New Jersey benefitted significantly under the 2014 law, which helped nearly 700,000 residents obtain new coverage, the state also stands to suffer more under any repeal, he added. (The ACAfrom 13.2 percent in 2013 to a record low 8.7 percent last year.)
During his campaign, Trump rallied Republican support with calls to “repeal and replace” the ACA early in his term, which begins January 20. Some experts believe it is— or the votes — to actually overturn the controversial law, which expanded coverage to some 20 million Americans and prompted serious investment by insurance companies, hospitals and other healthcare industries to ensure compliance. The federal mandate, requiring people to obtain coverage or face a tax penalty, has drawn widespread criticism.
But Pallone, a longtime advocate for the ACA in New Jersey, said the GOP may opt for another, less challenging route to major changes: the budget process. While revoking a federal law requires 60 votes in the 100-member U.S. Senate, funding changes can be made through the annual budget act, which needs only 50 votes to pass.
“This is all about money. What the GOP wants to do, and what Trump seems to want to do, is eliminate the funding,” Pallone said, noting that while the president-elect has suggested he would make changes over several years, there is nothing to prevent Republicans from starting to trim ACA spending early in 2017. “I would hope they wouldn’t make it effective immediately, that would be catastrophic,” he said.
Raymond Castro, healthcare analyst with the left-leaning NJPP, said the report is the first in a series that will examine the impact a repeal of the law would have on the state. He joined Pallone, Maura Collinsgru of Citizen Action, and Neil Eicher of the New Jersey Hospital Association to share their concerns about a potential repeal, urge citizens to lobby their elected officials to protect these benefits, and encourage state officials to shore up benefits in advance. A spokesman for Gov. Chris Christie — who received praise for embracing aspects of the law —did not respond to a request for comment Monday afternoon.
The NJPP study focused on the Medicaid expansion in particular, a largely successful element of the law that enabled some 500,000 Garden State residents to qualify for low-cost care they had previously been considered too “wealthy” to obtain. (In addition to the Medicaid expansion, the law established a discounted commercial “marketplace” for insurance plans; provided federal subsidies to most marketplace customers; and prompted regulatory changes that widely improved patient care.)
Eliminating the Medicaid expansion would impact every county in New Jersey, Castro found, displacing coverage for as few as 3,100 people in Hunterdon County and as many as 67,000 in Essex County. The loss would be most severe in the state’s urban areas. Some 163,000 adults in 10 cities would risk losing their health insurance, including one in seven Newark residents and one in three adults in Camden, the report said.
Two-thirds of these at-risk adults work, or live with someone who works, Castro learned, and they earn up to 138 percent of the federal poverty line — about $23,800 for a single parent with two kids. Many work as food servers, in schools or construction, as home health aides, or store clerks. “Adults earning this little in New Jersey — the equivalent to between $8.50 and $15 for full-time, year-round work — are struggling every day just to pay for food and housing in a state with one of the highest costs of living in the nation,” the report notes.
“If Medicaid (expansion) is repealed, these folks really have no other options,” Castro added, noting that insurance costs on the open market continue to rise and competition among carriers has diminished since the law took effect.
“Every one of those dollars and statistics points to a story of an individual,” added Collinsgru, who leads a consumer-focused coalition that seeks to expand healthcare access. “The repeal for them could be catastrophic.”
Still, these patients are only one concern, Castro noted. Repealing the ACA would endanger coverage for some 167,000 New Jersey residents who are not part of traditional Medicaid, but currently receive coverage thanks to tweaks to the program granted through a federal waiver process, he said.
These changes would also have a profound impact on healthcare providers, especially hospitals. If hundreds of thousands of people lose insurance, they are likely to seek care in emergency rooms at a growing rate — a trend Eicher said wastes hospital resources, often leads to less effective care, and drives up costs over time.
In addition, the ACA involved a drastic reduction in the level of Medicare dollars hospitals could collect. This revenue loss was offset by the promise of more patients with insurance, under Medicaid, and reduced emergency room costs as this group became healthier and more accustomed to routine, primary care. And, as the ACA rolls grew, thetraditionally used to offset hospital care for the uninsured, or “charity care.”
If insurance for these patients disappears, Eicher said, “that would be devastating to the industry and, quite frankly, some hospitals might not survive.”
The NJPP report also sought to quantify the larger financial impact of a potential repeal. For the state, the Medicaid expansion attracted an additional $3 billion in federal funds this year, anticipated at a total of $11 billion over four years. This influx enabled state officials to save more than $474 million in other costs, shifting payments to local health centers and various fees, and matching expenses to federal coffers under the law. Overall, the program prompted some $4 billion in annual state economic activity that is now in jeopardy, Castro said.
Financial losses are not the only fear, according to Collinsgru. The ACA also involved a major shift in the healthcare landscape, with a growing focus on rewarding providers for keeping patients healthy in an effort to improve their quality of life and reduce overall costs. “It’s about all of us who have benefitted because we have more people insured and we have a healthier population,” she said.
Collinsgru urged people to contact their Congress member or take other actions in— and if eligible. A suggests millions of Americans, and some 44,000 Garden State residents, meet the qualifications but haven’t taken advantage of the discounted plans. (The sign-up period lasts until December 15.) “We have made great progress, and we need to build on that progress and continue to fix the things that need to be addressed without turning this ship around,” she added.