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If the American Health Care Act (AHCA) becomes law, it would cost Massachusetts $1 billion by 2020, nearly $2 billion just two years later, and the losses would "likely have a greater annual impact in the years that follow," wrote Gov. Charlie Baker, a Republican, in a letter to the state's all-Democratic congressional delegation.
The governor's analysis is based on a report last week from the Congressional Budget Office (CBO) that said the federal government would shrink spending on Medicaid by $880 billion between 2017 and 2026. For Massachusetts, by fiscal year 2022, that would mean a loss of $1.3 billion.
In addition, the CBO estimated federal savings of $673 billion because the AHCA would eliminate the Obamacare insurance subsidies. Baker says that would cost Massachusetts another $200 million by 2022.
And Baker says the state would lose another $425 million to $475 million a year if new Medicaid rules in the AHCA put specific payments in the state's Medicaid waiver at risk. The CBO did not include state waiver changes in its assessment.
The governor highlights a few more troubling projections in the CBO report. It said that 7 million fewer Americans would be enrolled in employer-sponsored coverage by 2026 and that "over time, fewer employers would offer health insurance to their workers."
Baker says "this would exacerbate a trend that Massachusetts has seen over the last several years." To counter the trend, the governor has proposed reinstating a penalty on employers that do not offer coverage. His initial plan was panned by major employer groups in the state, but they are negotiating a possible alternative with the administration.
"Overall," Baker writes, "our analysis indicates that the AHCA would increasingly strain the fiscal resources necessary to support the Commonwealth's continued commitment to universal health care coverage."
The U.S. House is expected to vote on an amended version of the AHCA on Thursday. Support appears to be building with the changes. There are no new cost or savings estimates yet, but the House Ways and Means Committee chair has said there would be a new CBO score before Thursday's vote.
This article was originally published on March 21, 2017.
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