Blue States Face Biggest Cuts Under New Republican Health Care Plan
Which states would gain or lose federal funding in 2026.
The health insurance industry, after cautiously watching Republican health care efforts for months, came out forcefully on Wednesday against the Senate’s latest bill to repeal the Affordable Care Act, suggesting that its state-by-state block grants could create health care chaos in the short term and a Balkanized, uncertain insurance market.
In the face of the industry opposition, Senate Republican leaders nevertheless said they would push for a showdown vote next week on the legislation, drafted by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana.
That puts Republican senators in a squeeze, especially those whose states would lose money under a complicated formula in the bill. Generally, it would shift federal funds away from states that have been successful in expanding coverage to states where Republican leaders refused to expand Medicaid or encourage enrollment.
Republican senators from Alaska, Arizona, Arkansas, Colorado, Ohio and West Virginia will all have to decide whether to heed the pleas of consumers who like the current health law — or yield to the will of Republican leaders, donors and voters who demand an end to the Affordable Care Act.
That has put the spotlight not only on the three Republicans who killed the repeal drive in July — Lisa Murkowski of Alaska, John McCain of Arizona and Susan Collins of Maine — but also on those who have been reluctantly supportive, such as Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Rob Portman of Ohio.
Senate Republicans are already under pressure from 11 governors — including five fellow Republicans and a pivotal Alaskan independent — who this week urged the Senate to reject the last-ditch repeal effort.
The two major trade groups for insurers, the Blue Cross Blue Shield Association and America’s Health Insurance Plans, announced their opposition on Wednesday to the Graham-Cassidy bill. They joined other groups fighting the bill, such as the American Medical Association, the American Hospital Association, AARP and the lobbying arm of the American Cancer Society.
“The bill contains provisions that would allow states to waive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions,’’ said Scott P. Serota, the president and chief executive of the Blue Cross Blue Shield Association. “The legislation reduces funding for many states significantly and would increase uncertainty in the marketplace, making coverage more expensive and jeopardizing Americans’ choice of health plans.”
America’s Health Insurance Plans was even more pointed. The legislation could hurt patients by “further destabilizing the individual market” and could potentially allow “government-controlled single payer health care to grow,” said Marilyn B. Tavenner, the president and chief executive of the association. Without controls, some states could simply eliminate private insurance, she warned.
Insurers had been reluctant to speak out against the Republicans’ previous proposals in hopes that the White House and Congress would agree to stabilize insurance markets by providing critical funding for subsidies aimed at low-income Americans. But with hopes of securing that money before they finalize their rates virtually extinguished, insurers have less to lose by coming out against the proposal.
And many within the industry are worried that the next two years will be chaotic, with little support for the current market while states scramble to come up with a new way for individuals to buy policies.
“It’s just basically injecting chaos in 50 state capitals for the next two years,” said Sabrina Corlette, a research professor at Georgetown University.
At this point, Republicans have not secured the 50 votes they would need to pass the bill, with help from Vice President Mike Pence to break a tie. But President Trump, in New York for meetings with world leaders at the United Nations, said he thought the health care bill had “a very good chance’’ of passing.
It has “tremendous support from Republicans — certainly we’re at 47 or 48 already,’’ he said, and “a lot of others are looking at it very positively.’’
“A great Bill,” Mr. Trump concluded on Twitter later Wednesday.
The latest Republican drive to repeal the Affordable Care Act has created painful choices for Republican senators from states that stand to lose money under the legislation.
The bill would eliminate penalties for people who go without insurance, and it would funnel federal funds to states in the form of block grants for health care or coverage. States could decide how to spend the money, which is now being used for the expansion of Medicaid and for subsidies to help low- and middle-income people buy private insurance.
State officials were racing to try to figure out the impact, looking to experts to help them do the calculations.
“States such as Alaska, Connecticut, Delaware, New Hampshire, New Mexico, New York, Oregon, Vermont and Washington would see reductions of 25 percent or more over the 2020 to 2026 period,” compared with what they would receive under current law, said a monograph issued on Wednesday by Manatt Health, a unit of Manatt, Phelps & Phillips, a national law firm that advises many states on health care issues.
Among the Republicans agonizing over how to vote is Ms. Murkowski, who has said the bill’s effect on her state will be her paramount consideration.
The authors of the new repeal bill, Mr. Graham and Mr. Cassidy, say decisions about health care are best made at the local level.
Mr. McCain is a close friend of Mr. Graham, but is still studying the bill and has not said how he would vote.
The other Republican senator from Arizona, Jeff Flake, had no such hesitation. “Given the choice between Arizona or Washington deciding how federal health care dollars are spent in the state,’’ he said, “I’ll take Arizona every day of the week.’’
The Manatt study said Arizona would lose money under the bill, and a study by Avalere, a health policy consulting company, reached a similar conclusion. Both studies indicated that Tennessee would gain money.
Senator Bob Corker, Republican of Tennessee, said he liked the latest repeal bill. “I’d be ecstatic if we could finally make something happen on health care’’ by passing it, he said, adding: “I’m a states’ rights kind of guy. Our state has been well run for a long time. To know that our state would have the flexibility to carry out the program with more money than it now has could be a real win for us.’’
The studies by Manatt and Avalere suggest that West Virginia would lose money under the bill. Ms. Capito “is still evaluating the proposal,” said her spokeswoman, Ashley Berrang.
But the state’s senior senator, Joe Manchin III, a Democrat, said, “The numbers do not work at all for West Virginia, with an older, sicker population and an opioid addiction problem.”
“As a former governor, I like the concept of block grants because they give you flexibility,” Mr. Manchin said. “But the cuts are deeper than the needs we have, and our needs are greater than the money we would have under the bill.”