Republicans New Dumb ACA Repeal Gambit Will Bankrupt States=Millions More Will Lose Health Care

In Economy, Politics by Jonathan Tasini0 Comments

Let’s make a small connection here that needs emphasizing because it’s not usually made in the public debate over the new ACA repeal effort: The connection between block grants and the very, very poor general financial outlook at the state level.

You probably have read that the Graham-Cassidy proposal creates block grants to states to replace direct federal funding of the Medicaid expansion. Essentially, this would throw millions of lower-income people off Medicaid. The Kaiser Family Foundation is correct when it says: “Faced with substantially reduced federal funding, states would face difficult choices: raise revenue, reduce spending in other areas, or cut Medicaid provider payments, optional benefits, and/or optional coverage groups.

But, here’s the important missing component: a majority of states are in difficult and sometimes dire financial straights–not the least of the reasons being the obsession, mostly from Republican governors/legislatures, to mindlessly cut taxes and starve states of funds needed to provide basic services. And that is especially a big deal because, in theory, the nation is still going through an economic (relatively mild/mediocre/unimpressive) expansion (yes, let’s put aside for a moment wages for workers)–a time when state revenue should be positive and a state’s finances stable.

Here’s what the Center on Budget and Policy Priorities has to say about the states’ financial problems:

“During times of economic growth, states can be reasonably confident that the tax collections upon which they base their budgets will come in as predicted. This year is different, however. In 2017, 25 states are facing or have addressed revenue shortfalls More states expect mid-year revenue shortfalls than in any year since 2010, according to the National Association of State Budget Officers. [emphasis added]

The mid-year revenue shortfalls and resulting budget problems — some of which are due to state policymakers’ own ill-advised tax policy choices — that states are facing in 2017 appear to be the first signs of continuing problems. More than half the states lack the revenue needed to maintain services at existing levels in 2018. All told, two-thirds of the states are facing or have addressed revenue shortfalls this year, next year, or both. (See Figure 1 and Table 1.) [emphasis added]

States cut spending, increase revenues, or tap rainy day funds or other reserves to close budget gaps and maintain a balanced budget, which all states do because of laws or tradition. So far in 2017, states have used reserve funds and spending cuts to balance their budgets…[emphasis added]

THE BIG POINT IS:

What happens when the inevitable downturn arrives, entirely possible leading up to the years when the block grants end in 2026 (the bill does not extend the block grants beyond 2026)?

DISASTER…it will be the health care version of the Hunger Games–crumbs being fought over, while millions don’t get covered. States can’t print money. In turn, states will just throw people off Medicaid and/or  cut services even more and layoff public employees–largely because Republicans control a large majority of states and refuse to raise taxes on the richest residents–which in turn will put more strain on states from higher unemployment and lower tax revenues (because out-of-work people don’t pay taxes)

I’ve put below the tables CBPP created on budget shortfalls and the tables KFF produced to show the shortfalls expected to states if the idiotic Graham-Cassidy proposal passes. You can just go down the first one–CBPP–to see the budget shortfalls; the two right hand columns predict the 2018 budget shortfall and, then, what that shortfall means, in percentage terms, relative to the 2017 general fund from which states fund their operations.

Then, pick any state in the CBPP table and scroll down to the KFF tables to see what the shortfalls look like just when it comes to the proposed block grant funding through 2026–and, then, beyond 2026, when there is no money allocated.

 

State FY17 Revenue Shortfalls, millions % General Fund* FY18 Projected Budget Shortfall, millions % General Fund*
Alabama $0 0%  $513 6%
Alaska** $2,908 68%  $2,758 64%
California $0 0%  $1,600 1%
Colorado $119-$169 1%-1.6%  $605 6%
Connecticut $12-$56 .1%-.3%  $1,685 9%
Delaware $350 9%  $200 5%
Hawaii $266 3%  $0 0%
Illinois** $5,687 18%  $7,246 23%
Indiana $378 2%  $0 0%
Iowa $110 1%  $0 0%
Kansas $320 5%  $583 9%
Louisiana $304 3%  $440 5%
Maryland $400 2%  $544 3%
Massachusetts $175 .4%  $616 1%
Minnesota $0 0%  $283 1%
Mississippi $116 2%  $195 3%
Missouri $269 3%  $84 1%
Montana $303 13%  $91 4%
Nebraska** $252 6%  $857 10%
New Jersey $1,072 3%  $0 0%
New Mexico $69-$326 1%-5%  $211 3%
New York** $0 0%  $3,533 5%
North Dakota $360 12%  $0 0%
Oklahoma $84 1%  $878 15%
Oregon** $0 0%  $1,872 10%
Pennsylvania $774 2%  $2,080 6%
Rhode Island $0 0%  $112 3%
South Dakota $48 3%  $0 0%
Vermont $0 0%  $76 5%
Virginia $383 2%  $987 5%
Washington** $926 5%  $1,458 8%
West Virginia $123 3%  $498 12%
Wyoming $0 0%  $156 10%
All States $15,999 3% $30,160 5.1%

KFF tables:

Table 1: Changes to Federal Spending for ACA Coverage under Graham-Cassidy
($ Millions), 2020-2026
State Current Law Federal Funds for ACA Coverage Federal Funds under Block Grant Program Difference ($) Difference (%)
US Total 1,283,107 1,176,000 -107,107 -8%
Alabama 12,504 16,518 4,015 32%
Alaska 3,583 3,308 -275 -8%
Arizona 31,238 28,305 -2,933 -9%
Arkansas 15,063 13,930 -1,133 -8%
California 244,640 188,672 -55,969 -23%
Colorado 17,706 15,419 -2,288 -13%
Connecticut 17,897 12,294 -5,603 -31%
Delaware 5,149 4,130 -1,018 -20%
DC 2,956 2,671 -286 -10%
Florida 81,451 73,894 -7,557 -9%
Georgia 21,914 31,898 9,984 46%
Hawaii 5,498 5,379 -119 -2%
Idaho 4,350 5,508 1,158 27%
Illinois 43,086 42,508 -578 -1%
Indiana 25,665 24,987 -678 -3%
Iowa 9,280 10,106 826 9%
Kansas 4,563 7,348 2,786 61%
Kentucky 28,521 23,133 -5,388 -19%
Louisiana 20,297 20,434 137 1%
Maine 3,879 4,204 325 8%
Maryland 19,685 18,082 -1,603 -8%
Massachusetts 20,827 18,979 -1,848 -9%
Michigan 39,891 34,960 -4,931 -12%
Minnesota 28,178 19,834 -8,344 -30%
Mississippi 4,079 10,102 6,024 148%
Missouri 12,041 16,414 4,373 36%
Montana 6,010 4,490 -1,520 -25%
Nebraska 5,649 4,923 -726 -13%
Nevada 11,471 10,601 -870 -8%
New Hampshire 3,947 3,641 -306 -8%
New Jersey 34,315 29,077 -5,237 -15%
New Mexico 14,092 11,914 -2,178 -15%
New York 148,062 96,438 -51,623 -35%
North Carolina 40,378 34,673 -5,704 -14%
North Dakota 2,138 1,975 -164 -8%
Ohio 37,526 39,281 1,755 5%
Oklahoma 10,526 12,770 2,244 21%
Oregon 28,744 19,544 -9,200 -32%
Pennsylvania 57,430 46,056 -11,373 -20%
Rhode Island 4,938 4,191 -747 -15%
South Carolina 11,674 16,218 4,544 39%
South Dakota 1,747 2,542 795 45%
Tennessee 15,402 22,140 6,738 44%
Texas 45,519 79,792 34,273 75%
Utah 5,918 7,717 1,799 30%
Vermont 3,477 2,407 -1,070 -31%
Virginia 15,676 20,459 4,783 31%
Washington 32,947 27,631 -5,317 -16%
West Virginia 8,657 8,128 -530 -6%
Wisconsin 11,338 14,826 3,489 31%
Wyoming 1,586 1,548 -38 -2%
SOURCE: Kaiser Family Foundation estimates, September 2017.
Table 2: Total Change in Federal Spending under Graham-Cassidy due to
ACA Block Grant and Medicaid Per Capita Cap ($ Millions), 2020-2026
State Change in Federal Funds Due to Block Grant Change in Federal Funds Due to Medicaid Per Enrollee Cap Total Change in Federal Funds ($)
US Total -107,107 -52,759 -159,867
Alabama 4,015 -585 3,430
Alaska -275 0 -275
Arizona -2,933 -1,562 -4,495
Arkansas -1,133 -1,138 -2,271
California -55,969 -5,711 -61,680
Colorado -2,288 -573 -2,860
Connecticut -5,603 -156 -5,759
Delaware -1,018 -146 -1,164
DC -286 -335 -621
Florida -7,557 -2,155 -9,712
Georgia 9,984 -2,645 7,339
Hawaii -119 -164 -283
Idaho 1,158 -309 849
Illinois -578 -1,228 -1,807
Indiana -678 -831 -1,509
Iowa 826 -421 405
Kansas 2,786 -341 2,445
Kentucky -5,388 -958 -6,346
Louisiana 137 -804 -667
Maine 325 -379 -54
Maryland -1,603 -981 -2,584
Massachusetts -1,848 -1,707 -3,555
Michigan -4,931 -2,280 -7,211
Minnesota -8,344 -1,016 -9,359
Mississippi 6,024 -762 5,262
Missouri 4,373 -1,331 3,042
Montana -1,520 0 -1,520
Nebraska -726 -180 -906
Nevada -870 -282 -1,153
New Hampshire -306 -148 -454
New Jersey -5,237 -1,252 -6,489
New Mexico -2,178 -808 -2,986
New York -51,623 -645 -52,268
North Carolina -5,704 -2,465 -8,170
North Dakota -164 -70 -233
Ohio 1,755 -2,365 -610
Oklahoma 2,244 -947 1,298
Oregon -9,200 -578 -9,778
Pennsylvania -11,373 -1,004 -12,377
Rhode Island -747 -231 -977
South Carolina 4,544 -1,373 3,171
South Dakota 795 -109 685
Tennessee 6,738 -1,978 4,759
Texas 34,273 -5,823 28,449
Utah 1,799 -643 1,156
Vermont -1,070 -207 -1,277
Virginia 4,783 -917 3,866
Washington -5,317 -1,155 -6,472
West Virginia -530 -435 -964
Wisconsin 3,489 -562 2,927
Wyoming -38 -62 -100
SOURCE: Kaiser Family Foundation estimates, September 2017.
Table 3: Total Change in Federal Spending under Graham-Cassidy due to
ACA Block Grant and Medicaid Per Capita Cap ($ Millions), 2027
State Loss of Federal Funds for ACA Coverage if Congress Does Not Extend Block Grant Loss of Federal Funds Due to Medicaid Per Enrollee Cap Total Loss of Federal Funds
US Total -225,072 -15,001 -240,073
Alabama -2,058 -155 -2,212
Alaska -632 0 -632
Arizona -5,559 -462 -6,021
Arkansas -2,734 -326 -3,060
California -43,846 -1,718 -45,564
Colorado -3,172 -164 -3,335
Connecticut -3,196 -51 -3,248
Delaware -924 -41 -964
DC -545 -99 -643
Florida -13,403 -601 -14,004
Georgia -3,606 -763 -4,369
Hawaii -998 -47 -1,045
Idaho -716 -84 -800
Illinois -7,656 -346 -8,002
Indiana -4,643 -226 -4,869
Iowa -1,659 -116 -1,775
Kansas -751 -95 -846
Kentucky -5,208 -268 -5,477
Louisiana -3,590 -211 -3,801
Maine -638 -107 -745
Maryland -3,525 -290 -3,815
Massachusetts -3,734 -508 -4,243
Michigan -7,159 -648 -7,807
Minnesota -4,965 -287 -5,252
Mississippi -671 -208 -879
Missouri -1,981 -358 -2,339
Montana -1,048 0 -1,048
Nebraska -930 -50 -980
Nevada -2,058 -79 -2,137
New Hampshire -704 -43 -747
New Jersey -6,115 -359 -6,474
New Mexico -2,570 -238 -2,807
New York -26,194 -202 -26,395
North Carolina -6,644 -674 -7,319
North Dakota -379 -19 -398
Ohio -6,790 -687 -7,477
Oklahoma -1,732 -269 -2,001
Oregon -5,194 -162 -5,356
Pennsylvania -10,181 -231 -10,412
Rhode Island -893 -66 -958
South Carolina -1,921 -392 -2,313
South Dakota -288 -31 -318
Tennessee -2,534 -582 -3,116
Texas -7,490 -1,577 -9,068
Utah -974 -180 -1,154
Vermont -619 -59 -678
Virginia -2,580 -259 -2,838
Washington -5,984 -347 -6,331
West Virginia -1,553 -124 -1,677
Wisconsin -1,866 -175 -2,041
Wyoming -261 -17 -278
SOURCE: Kaiser Family Foundation estimates, September 2017.

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