Republicans health care plan could launch some ugly political battles in state legislatures
Even if a watered-down version of House Republicans' health care legislation becomes law, states are probably going to be on the book for billions of dollars of health care costs, especially for the poor and sick. And that means they're going to have to make some hard choices: Do you find a way to raise taxes/cut other services to keep your most vulnerable population insured? Or do you just stop insuring them?
That's the heart of the question facing all 50 states as Republicans in Washington unwind the federal government's involvement in health care. Legislatures trying to answer it could get ugly.
States just don't have the money right now to make up for the health insurance subsidies the federal government could cut back on. Thirty-one states started 2017 with deficits — a couple are closing in on $1 billion, according to a MultiState Associates study.
But the House Republicans' health care plan would whack almost every state's budget in potentially big ways: It would drastically cut the federal government's contribution to Medicaid (even states that didn't expand Medicaid under Obamacare). And Medicaid spending was the largest slice of states' spending in fiscal 2016. It would drastically cut federal subsidies for people who get their insurance through the marketplaces Obamacare set up. And it would leave millions of mostly middle- and lower-income people uninsured (though how many, we don't know, since Republicans voted on their bill without an official estimate). And uninsured people who get sick could cost state and local governments and private hospitals up to $1 trillion in unpaid-for health coverage over the next decade, according to one analysis from the Urban Institute.
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