Proposed Obamacare repeal wouldn’t blow hole in state budget — yet

If the federal Republican plan to repeal the Affordable Care Act passes Congress, Washington’s lawmakers may have to dole out billions of dollars if they want to retain the state’s current health coverage.

But that conversation largely won’t have to happen at the same time as this year’s contentious budget negotiations over paying for court-ordered fixes to public schools — as some at the Capitol had feared.

While the GOP health care proposal would drastically shrink federal dollars that pay for the government health insurance program known as Medicaid, the reduction wouldn’t happen until 2020.

“No matter what may come out of Washington, D.C., our state’s legislators will have an additional two years’ time to address any changes that affect Washingtonians,” said GOP state Sen. Ann Rivers, in a statement. Rivers is chairwoman of the Senate’s health care committee.

In the short term, the GOP plan would immediately cut $180 million in federal money from the two-year budget that helps pay for long-term care of the elderly and disabled. The state would have to pick up that cost itself if lawmakers want to continue the same coverage, said Bob Crittenden, a health care policy expert for Democratic Gov. Jay Inslee.

But that shortfall would pale in comparison to the potential billion-dollar hole in Medicaid funding down the line.

State lawmakers this year already need to find more than $1 billion to meet the state Supreme Court education ruling known as McCleary in the 2017-19 budget. The state’s high court ruled in 2012 that Washington is overreliant on local levies that now pay for part of teacher and school administrator salaries.

Democrats who have a majority in the state House, and Republicans who control the Senate, are negotiating over how to shift those costs to the state. That process may spill over into a special session as lawmakers debate what kind of new taxes — and how much new revenue — are necessary to pay for the ruling.

When President Donald Trump was elected last year, some anticipated Congress would move faster and repeal the ACA within months, creating a budget battle over health care costs in Washington state alongside the already difficult McCleary talks.

That clash appears to be postponed.

Speaker of the House Frank Chopp, a Seattle Democrat, told reporters Tuesday he was assuming “we’re going to continue the (Medicaid) program as is” for the immediate future.

Inslee’s office Wednesday provided further analysis of the decisions the state would have to make if the GOP health care plan does pass.

The ACA expanded Medicaid coverage in Washington state, offering insurance to 600,000 additional people. Under the Republican health care proposal, the state would need to come up with about $1.3 billion per year starting in 2023 to continue the same level of health care. The costs would be lower between 2020 and 2023.

Inslee on Wednesday told reporters he was still worried about trying to backfill the federal Medicaid expansion money.

“We do not have that money,” he said.

Washington state also would need to plug a $351 million per biennium hole in the state budget beginning in 2020 to pay for existing state services now supported by federal dollars.

Rivers, from La Center, said nobody should put too much stock into the state’s analysis quite yet. She said she expects the federal GOP proposal to change from its current form as it winds through Congress.

The legislation has already faced significant pushback from some congressional Republicans, as well as Democrats.

State Rep. Joe Schmick, another Republican leader on health care policy, said the plan was “the first rendition” of the Obamacare repeal.

“Have we seen the final one? I kind of doubt it,” the Colfax lawmaker said. “So we’ll just have to wait and see.”

This story was originally published March 16, 2017 at 7:00 AM with the headline "Proposed Obamacare repeal wouldn’t blow hole in state budget — yet."