While the national debate about the future of health care rages on in Washington, D.C., local employers are left to grapple with how repealing the Affordable Care Act might actually impact their individual businesses.
In Rhode Island, that also means thinking about the impact in terms of Medicaid expansion, as funding through the federal entitlement affects local businesses in several ways.
“There are 70,000 Rhode Islanders who are now covered through Medicaid expansion, and many of them work at businesses that cannot afford to provide health insurance coverage to their employees,” said Linda Katz, policy director at The Economic Progress Institute, a progressive think tank in Providence.
“Medicaid has been a great boon not only for the expansion population, but also for businesses,” she added.
When the much-debated Affordable Care Act, also known as Obamacare, rolled out after it was signed into law in 2010, it gave individual states the option to expand Medicaid coverage to a new segment of the population: nondisabled adults aged 19-64 years old.
Rhode Island jumped at the opportunity, and has since expanded the number of people enrolled in Medicaid by 70,000 people, according to state estimates.
Today, nearly 30 percent of Rhode Islanders – or 290,000 people – receive health insurance and/or long-term services and supports through Medicaid, which now faces enormous cuts as Congress contemplates repealing it and replacing it with a new health care law: The American Health Care Act.
Katz argues the bill recently passed by the House will not only gut insurance for more than 100,000 Rhode Islanders, but it could also negatively impact local employers.
“There are employers now faced with the fact that many of their employees, who are currently insured [would become] uninsured – whether that’s through Medicaid or through the number of Rhode Islanders who have been able to get coverage through the state’s health insurance exchange,” Katz said.
There are currently about 30,000 Rhode Islanders who buy coverage through the state-based exchange, Healthsource RI, and about 88 percent of recipients qualify for federal tax credits, while 66 percent qualify for subsidies to pay out-of-pocket costs.
Medicaid expansion and the number of individuals insured through the state-based exchange have helped drive down the state’s uninsured rate from 11.6 percent in 2013 to its current level of about 4.1 percent.
Gov. Gina M. Raimondo, who took office in January 2015, says she’s actively trying to point these statistics out to the federal government as evidence that the new health care law would negatively impact coverage in Rhode Island.
“I went to Washington, [D.C.] earlier this year and had an opportunity to talk with [President Donald Trump], and my message to him was that the Affordable Care Act is working in Rhode Island,” Raimondo said at the EPI’s annual conference, this year entitled “Budget RhodeMap: Our Path Around Federal Road Blocks.”
The American Health Care Act passed the House on May 4, and is under consideration in the Senate. If approved as is, Medicaid expansion and the tax credits and cost-sharing reductions could disappear, leaving thousands of Rhode Islanders without insurance and pricing out many more.
The Greater Providence Chamber of Commerce polled its members to ask whether they supported repealing the ACA. About 40 percent of respondents said they opposed repeal, 35 percent supported repeal and 24 percent didn’t know.
“People really don’t know how it’s going to impact them,” said Laurie White, Chamber president.
When it comes to the state’s budget, the impact could be immense.
In Rhode Island, the federal government covers 95 percent of the costs associated with Medicaid expansion, according to the EPI. If that funding disappears – as is currently proposed – the state would have to scramble to cover the gap, or gut the program altogether. And with an estimated $455.5 million at stake, the latter is more likely.
“In the versions of repeal that I’ve seen, there’s really no way that the state … can make up the shortfall monetarily because it’s massive amounts of money,” Raimondo told Providence Business News. “And it will not only rip health insurance away from tens of thousands of people, but I think you’ll also see layoffs at hospitals because of [increased costs] of uncompensated care.”
M. Teresa Paiva Weed, Hospital Association of Rhode Island president, said, “Most alarming is the legislation repeals much of the funding currently dedicated to providing coverage in the future, yet reductions to payments for hospital services remain.
“If coverage is not maintained … those resources need to be returned to hospitals and health systems to provide services to what will likely be an increased number of uninsured patients,” said the former state Senate president. n
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