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GOP’s Healthcare Plan Draws Rapid and Fierce Fire in New Jersey

Republican proposal, which includes drastic changes in Medicaid funding, would have ‘devastating impact on accessibility and affordability’

ACA protest

Soon after Republicans in Congress unveiled their long-awaited proposal to replace the Affordable Care Act, healthcare providers and patient advocates joined Democratic officials from New Jersey in harshly criticizing the plan they said would drive up costs for vulnerable patients, reward wealthier residents and the insurance industry, and destroy gains made under the landmark federal law.

U.S. Rep. Frank Pallone (D-Long Branch), a longtime supporter of the ACA, said the plan would “rip healthcare away from millions.” Small-business owners warned it could add tens of thousands to their annual healthcare costs. State Sen. Joseph Vitale (D-Middlesex), the longtime Senate health committee chairman, warned it could destabilize parts of the private insurance markets. And Assembly Speaker Vincent Prieto (D-Hudson) called on Gov. Chris Christie to take advantage of his close connection to President Donald Trump to urge him to reject what he called the “Republican health care debacle.”

The proposal, introduced in the U.S. House of Representatives on Monday, calls for drastically changing how the federal government pays for Medicaid, creates a new system of tax credits for low-income workers who don’t qualify for Medicaid or other government programs — and don’t have health coverage through work — and allows insurance companies to charge older, sicker patients more than they charge those who are young and healthy.

Experts suggest the changes would force states to make difficult decisions over where to spend these dollars, and could lead to program cuts or state tax increases. Instead of paying for patient treatments as needed, as Medicaid now does, the new plan would involve a block grant, or per-patient fixed annual payment to each state. New Jersey now spends $15 billion a year on its Medicaid program, according to a report from the New Jersey Health Care Quality Institute, and ACA supporters have warned that a move to block grants could cost New Jersey as much as $4 billion in annual federal funding.

Replaces subsidies with tax credits

The GOP proposal also states that, starting in 2020, states must freeze enrollment for higher-income Medicaid enrollees, or members of the ACA’s “expansion population.” It also enables the federal government to significantly cut federal funding for existing members who are not able to maintain continuous enrollment — something experts said is challenging with a program that involves strict income limits. Care for these patients is now covered largely by federal dollars, so restrictions would also leave the state facing difficult choices about who and what to pay for in the future. New Jersey’s Medicaid program now covers 1.8 million people, including some 550,000 who are part of the expansion.

When it comes to commercial insurance reforms, the proposal — titled the American Health Care Act — would also replace the ACA’s system of subsidies that helped low-income people, including nearly 300,000 Garden State residents, purchase insurance plans. The Republican measure would instead create a tax-credit model that would provide thousands of dollars a year to help patients who don’t have insurance through their job or the government to offset the cost of premiums. But it would also allow insurance companies to charge premiums as much as 30 percent higher for patients who did not maintain steady coverage.

Critics said this model only benefits those who earn enough to file federal income tax, not the poorest residents, and warned that other regulatory changes would allow insurance companies to charge older, sicker patients as much as five times what they charge those who are young and in good health. Additional charges for those whose coverage has lapsed, along with these other changes, would make health coverage less accessible for vulnerable residents, they warned.

The proposal’s unveiling on Monday follows months of behind-the-scenes discussions among GOP leaders and President Donald Trump, who has made repealing and replacing “Obamacare” a priority — but who recently conceded he didn’t realize how complicated healthcare policy can be. The measure also follows a growing number of protests among patient advocates concerned about the impact on vulnerable citizens and public relations campaigns from healthcare providers and insurance companies who have invested billions of dollars in implementing the ACA, which was passed in 2010 and took full effect in 2014. A total of 800,000 New Jersey residents gained coverage under the law and millions of others benefitted from insurance reforms.

‘…devastating to New Jersey’

As drafted, the American Health Care Act also calls for $100 billion in federal funding to be distributed among states to help them address additional costs for these individuals, through state subsidies or the creation of a high-risk insurance pool. The proposal has not yet been reviewed by the Congressional Budget Office, which will provide cost estimates for the plan, so it is not clear how many people would be covered by any of these changes.

"This so-called plan would substantially cut back funding to states that cover poor adults through Medicaid. That's devastating to New Jersey, especially to our efforts to combat the opioid epidemic. We cannot stand idle as our bipartisan effort is torn apart,” Speaker Prieto said, urging the governor and New Jersey’s GOP Congress members to “do the right thing” and oppose the plan.

"New Jersey also cannot back any plan that would cut financial assistance for low-income residents while offering new financial benefits for the upper-middle class and the rich. Any plan that shifts costs to New Jersey and our hospital systems while subjecting individuals to higher deductibles and copayments must be a non-starter,” Prieto said.

Some behavioral health providers also raised concerns about the new proposal, suggesting that as Medicaid moves to a block grant system with fewer dollars to cover the cost of care, vulnerable patients — particularly those with addictions — will lose access to treatment. The expanded coverage under the ACA has been essential in extending treatment to working-poor residents struggling with addiction issues, providers have said, and requirements in the law also enhanced behavioral care benefits for those covered by commercial plans.

New Jersey has been particularly challenged by opiate addiction in recent years and Christie has made expanding access to treatment his first priority in recent months. But, despite requests from Democratic leaders and patient advocates, he has refused to oppose efforts to repeal the ACA, in fact suggesting block grants could be advantageous.

The GOP plan that materialized Monday drew quick criticism from lawmakers like Vitale, who said it would have a “devastating impact on accessibility and affordability for millions of Americans” and reverse the gains made under the ACA. "This proposal and its impact was either poorly thought through, or Republicans in Congress could not care less about providing affordable and quality healthcare for the majority of our citizens. It should be rejected,” Vitale said.

Maintains some popular parts of ACA

In a website established by Congressional Republicans to highlight the benefits of the legislation, the sponsors underscored how the proposal would eliminate the controversial ACA mandate that required people to pay a fine if they didn’t purchase insurance, reduce other taxes on certain medical expenses, and give individuals and business owners far more flexibility over their healthcare decisions. It would also eliminate the tax penalty for individuals and employers who fail to obtain insurance coverage or provide it to their workers.

The proposal would maintain popular insurance protections implemented under the ACA, including the prohibition on coverage denial — or additional charges — for patients with pre-existing medical conditions. It also would continue to allow young adults to remain on their parents’ policies until age 26. Many of the preventive care mandates, like cancer screenings and well-baby checks, created under the ACA would also be maintained.

“We will have a stable transition toward a system that empowers patients with more choices and lower costs. During the transition, Americans will continue to have access to their existing health care options,” the website notes.

But Democrats blasted the plan for its impact on the healthcare landscape and pledged to work together to fight the plan, which is scheduled for its first hearing on Wednesday, in the House Commerce and Energy Committee.

“The Republican repeal bill would rip healthcare away from millions of Americans, ration care for working families and seniors, and put insurance companies back in charge of health care decisions – contrary to everything President Trump has said he would do with his health care plan,” said U.S. Rep. Frank Pallone (D-Long Branch), the committee’s Democratic leader, in a joint statement with Rep. Richard Neal (D-MA). “The Republican repeal bill would not protect patients, save money, or help working families; it is nothing but a drastic and devastating step backward,” he added.

U.S. Sen. Cory Booker (D-NJ), said the plan would harm the economy and patient health, and pledged to oppose it as it moved through Congress. “This repeal bill would force millions of Americans to pay more money for worse health insurance that’s attainable for fewer people,” Booker noted.

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