Health insurers concerned by 'dramatic' Medicaid cuts in GOP bill

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(Bloomberg) -- Health insurers criticized the steep cuts to Medicaid proposed in the Senate bill to repeal and replace the Affordable Care Act as “too much, too fast.”

After hospital, doctors and advocacy groups lambasted the proposal released Thursday, the health insurance industry’s main Washington lobby said it’s concerned about its impact on states’ finances and low-income Americans.

The end to funding for Obamacare’s expansion of Medicaid and a move to cap how much the federal government spends on the state-federal health program for the poor could harm state budgets and program beneficiaries, according to America’s Health Insurance Plans.

“We’re concerned that it would lead to dramatic cuts in services or dramatic cuts in the number of beneficiaries who would rely on Medicaid,” said Kristine Grow, a spokeswoman for AHIP. “It’s too much, too fast with too great a burden on the states.”

AHIP isn’t taking a formal position on the bill, and the group said measures to shore up the individual health insurance market are largely positive. Those include continued payments of cost-sharing subsidies to insurers, a repeal of the tax on health insurers, and a $50 billion stability fund created by the law.

Short-term Stability

“For immediate stability of the individual market, there are a lot of things in this bill that are really positive,” Grow said. She said there’s still a need for some sort of rule designed to push healthy people to buy insurance, to replace Obamacare’s individual mandate --which would be eliminated under the Senate proposal.

The Blue Cross Blue Shield Association, which represents health insurers covering more than 100 million people in the U.S., said it will continue to push for a replacement for Obamacare’s coverage requirement as well.

“We are encouraged that the draft Senate legislation funds cost-sharing reductions, which help those who need it most,” BCBSA said in a statement. The group praised the bill’s extra funding for insurers as well. “However, it is also critical that strong incentives for people to keep continuous coverage be included to ensure a balanced market,” the lobby group said.

Health insurers have largely lost money in the first three years of Obamacare, though there are signs financial results may be improving. Many of the companies help manage state Medicaid programs, meaning their profits can be hurt by those cuts as well.

Doctors and hospitals have largely panned the Senate bill, with the American Hospital Association telling senators to “ go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it.” The American College of Physicians in its own letter said it “urges the strongest possible opposition to the bill and asks all Senators to vote against this harmful legislation.”

Bloomberg News