Health insurers says Senate bill’s Medicaid cuts to hurt states

By Caroline Humer

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NEW YORK (Reuters) – Health insurers are concerned about the U.S. Senate’s plans to cut the Medicaid program for the poor and the impact such a move would have on state governments, the industry’s largest lobbyist said on Friday.

Republicans in the U.S. Senate on Thursday unveiled a draft bill to repeal and replace the Affordable Care Act, commonly known as Obamacare. The bill would replace its individual insurance coverage with new subsidies and requirements and cut federal funding for Medicaid.

Hospital groups came out against the bill on Thursday.

The legislation includes changes health insurers had been seeking, including tens of billions of dollars to help stabilize the individual insurance market during a transition year and the ability to charge older members more.

But it repeals the individual mandate requiring people to buy health insurance without creating incentives for Americans to stay in their plans. In addition, the proposed changes to Medicaid financing for people who were newly covered under Obamacare and those in the standard Medicaid program are dramatic. That program is jointly funded by the states and the federal government.

“We’re worried about the burden it creates for the states,” Kristine Grow, spokeswoman at America’s Health Insurance Plans (AHIP), said on Friday. The lobbying group is waiting to see the analysis of the bill’s impact on spending and insurance coverage from the nonpartisan Congressional Budget Office, expected next week.

AHIP represents Anthem Inc, one of the largest sellers of health insurance on the Obamacare exchanges, and Cigna Corp, among others. Anthem has decided to leave the individual market in three of the 14 states where it sells Blue Cross Blue Shield plans, while Cigna is still weighing its decision.

Molina Healthcare Inc, which has more than 1 million customers in Obamacare plans, said in a statement that dropping the individual mandate with no replacement provision will lead healthy people to forgo coverage and thus drive up premium rates.

The U.S. House of Representatives’ version of the Obamcare repeal bill includes a provision in which customers must maintain coverage or pay more, but Democrats argued that conflicted with Republican President Donald Trump’s promise to keep the guaranteed insurance provision of Obamacare.

Molina also said that the bill’s proposal to tie cost-sharing subsidies to the lowest-level “bronze”-rated healthcare plans will make coverage less affordable, not more, by raising customers’ out-of-pocket costs. Under Obamacare, these subsidies are tied to the mid-range “silver”-rated plans.

(Reporting by Caroline Humer; Editing by Jonathan Oatis)