The GOP's Obamacare replacement includes many Republican governors' biggest fear -- and it could doom the bill

Ohio Gov. John Kasich’s response on Sunday, when asked about the House Republican proposal to overhaul the system established by Obamacare, perhaps exemplifies why the bill is going to be so hard to pass.

In an interview with Kasich on NBC’s “Meet the Press,” host Chuck Todd presented a clip of Vice President Mike Pence speaking to an Ohio TV station. He said the AHCA would provide Ohio with “the resources and the flexibility … to offer our most vulnerable citizens even better coverage.”

Todd asked Kasich if Pence was right, to which the Republican governor answered bluntly.

“No, he’s not right,” Kasich said.

Kasich’s main gripe with the AHCA: a radical rollback of Medicaid, the government-run health program that provides insurance primarily to
pregnant women, single mothers, the disabled, and seniors with low incomes.

Under the ACA, eligibility for Medicaid was expanded to include any adult living under 138% of the federal poverty level —
an income of $US27,821 for a family of three in 2016. It’s up to states to decide if they want to participate. States that expanded Medicaid under the new ACA requirements received federal funds to do so.

Thirty-two states and the District of Columbia have chosen to participate, leading to more than 11 million new people nationwide gaining coverage, a number that continues to grow.

The AHCA features a significant rollback to the Medicaid expansion. Here’s how:

1. The bill ends the government’s commitment to providing funding for the expansion population, leaving it to states to provide funding if they so desire. The vast majority of expansion states do not have the funds to keep the program as is.

2. While expansion adults will be allowed to remain covered, states will no longer be able to enroll additional people under the expansion rules after 2020.

The Congressional Budget Office on Monday released a report estimating that the changes would likely result in a loss of 14 million people from the Medicaid rolls by 2026.

That’s not likely to be popular with the public or politicians in expansion states that will suffer the brunt of those coverage losses.

For instance, 65% of Americans said Medicaid should continue largely as it exists today, despite Republican proposals to change the program, according to a tracking poll released late last month by the Kaiser Family Foundation.

Governors in charge of expansion states, 16 of which are Republican, have also been in favour of retaining the expansion. Many have acknowledged the program’s importance to their states in recommendation letters solicited by Republican congressional leaders.

Kasich has been the most vocal.

As he argued on Sunday, the Medicaid expansion has provided healthcare to more than 700,000 people in Ohio alone, many of whom suffer from mental illnesses, substance abuse disorders, or have chronic diseases.

The expansion has been a literal life-saver for the state, as it faces the brunt of the nation’s opioid crisis. Ohio suffers third-highest drug-overdose death rate in the country, with
29.9 deaths per 100,000 people, and it has seen an explosion in demand for substance-use treatment in recent years. The Medicaid expansion has provided substance-abuse treatment to 108,000 people.

“Thank God we expanded Medicaid, because that Medicaid money is helping to rehab people,” Kasich said last month after signing a bill targeting Ohio’s opioid crisis.

While Kasich stopped short of defending Obamacare as a whole on Sunday, he reiterated his unequivocal support for the Medicaid expansion.

“Don’t kill Medicaid expansion,” Kasich told Todd. “Here’s what we’re talking about. If you’re drug addicted, if you’re mentally ill, you have to consistently see the doctor. From what I see in this House bill, the resources are not there.”

Ohio is far from the only state that would be affected. Of the 10 states with the highest drug-overdose death rates, only Tennessee and Utah opted out of the ACA’s Medicaid expansion.

About 1.29 million people in the US are receiving treatment for substance use disorders or mental illnesses thanks to the Medicaid expansion, according to research conducted by Harvard Medical School Health Economics professor Richard Frank and New York University dean Sherry Glied.

The changes to Medicaid funding and eligibility aren’t the only ways the AHCA could affect the opioid crisis. The bill also proposes to eliminate “Essential Health Benefits” from certain Medicaid plans. The “Essential Health Benefits” are a series of services required to be in all health plans, one of which is mental health and substance use treatment. Prior to the Affordable Care Act’s implementation, mental-health and substance-use treatment tended to be “sparsely covered” by Medicaid providers, Frank told Business Insider.

The loss in Medicaid funds resulting from the AHCA, combined with the elimination of those benefit requirements, would create a fraught choice for states.

“The states then have a choice: They can continue to take on those responsibilities and pay for it out of their own budgets, or, if they are under pressure, they have to scale back,” Frank told CNN. “Historically, states have been loath to cover substance abuse treatment.”

If the AHCA does become law and the Medicaid expansion is phased out, Ohio, Pennsylvania, and West Virginia, among other states suffering the brunt of the opioid crisis, will be ill-suited to handle the loss in funds, government officials and treatment experts say.

Pennsylvania is suffering a $US600 million budget shortfall as of December and could go as high as 1.7 billion by July, according to the Pittsburgh Post-Gazette. Pennsylvania Republican State Rep. Gene DiGirolamo told Business Insider recently that there are “no extra dollars” to insure residents or provide addiction treatment to those who lose coverage because of an ACA-repeal. The situation is equally dire in West Virginia.

“I’m really, really worried about what’s happening in Washington. And I say that as a Republican,” DiGirolamo said.

Republicans in the expansion states have taken notice.

On the same day House Republicans unveiled the AHCA bill, four Republican senators — Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado, and Lisa Murkowski of Alaska — released an open letter to Senate Majority Leader Mitch McConnell denouncing the possible overhaul of Medicaid. Meanwhile, a group of Republican governors are reportedly working on a proposal that preserves the Medicaid expansion while fulfilling other Republican objectives, like cutting costs.

With a vote as contentious and split down party lines as the AHCA will be, four Republicans voting against the bill would likely doom it.

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