Most states not ready to take over health care, experts say

Advocates of the latest Obamacare repeal effort, the Senate’s Graham-Cassidy bill, have touted it as a way to give control of health care to states and allow for greater innovation.

But Pennsylvania and nine other states haven’t been able to pass a budget on deadline, the most basic function of a state government. Taking over the complex job of administering a brand-new health care system, with less funding than the current system, is a significant challenge.

“This bill is a prescription for chaos in 50 state capitols around the country,” said Sabrina Corlette, research professor at the Georgetown University Center on Health Insurance Reforms and an expert on healthinsurance market reforms.

The bill would undo key parts of the Affordable Care Act, such as the individual mandate to have health insurance. It would also overhaul the Medicaid program from the currently more open-ended funding that exists now to a system in which there is a fixed pot of money for states.

Its architects argue state control will bring the best results.

“This proposal removes the decisions from Washington and gives states significant latitude over how the dollars are used to best take care of the unique health care needs of the patients in each state,” said a statement from U.S. Sens. Lindsey Graham, R-S.C., Bill Cassidy, R-La., Dean Heller, R-Nev., Ron Johnson, R-Wis., and former U.S. Sen. Rick Santorum, R-Pa.

But for those who have watched the gridlock in Harrisburg, action and innovation aren’t the words that come to mind. With a Democratic governor and large Republican majorities in the General Assembly, in recent years Pennsylvania’s state Capitol has been marked by partisan gridlock and prolonged budget disputes fueled by a structural deficit. Taking on a sweeping overhaul of a complex system such as health care would be a challenge — the Legislature and governor can’t even agree on a spending plan for the fiscal year that beganJuly 1.

The National Conference of State Legislatures says nine other states are in the same situation.

Senate Republicans have been planning to vote early next week and the House was expected to vote immediately after in order to beat a Sept. 30 budget reconciliation deadline. Those plans have been thrown into chaos by the announcement that Sen. John McCain, R-Ariz., opposes the measure. His is a key vote, and his vote bucking his party tanked the earlier GOP effort to dismantle the ACA.

“The proposal gives states the resources and regulatory flexibility to innovate and create health care systems that lower premiums and expand coverage,” through lump sum payments of federal health care dollars, said a statement from the Republican senators sponsoring it.

Proponents, including Mr. Santorum, believe decisions are best made at the state level by local people who are closer to the issues the legislation attempts to resolve.

“A block grant approach gives a lot of flexibility to the states and it’s proven successful,” said Mr. Santorum, who helped design a similar block grant program for welfare as a memberof Congress in the 1990s.

That sounds good in theory but doesn’t always work, said Michael Campbell, professor of law at Villanova University’s Widger Schoolof Law.

“While there is a certain appeal to crafting health policy at the state level, that is primarily what we had before the ACA, and it was not working well for people who got sick or had an accident. The more local you get in this area, the closer you get to policy by anecdote or policy by squeaky wheel,” Mr.Campbell said.

“Graham-Cassidy would put the state’s budget problems on steroids,” said U.S. Sen. Bob Casey, D-Pa., who opposes the legislation.

As a former statehouse staffer in the 1990s, U.S. Rep. Mike Doyle, D-Forest Hills, can imagine how the planning would go in Harrisburg, where the House and Senate — both under Republican control —cannot agree on a budget.

“As it’s currently constituted, I can’t imagine that they could agree on a program,” Mr. Doyle said Friday.

Outside experts also say that states don’t have the resources to do what the bill would require.

“States will need to develop overall strategies, invest in infrastructure development, systems changes, provider and managed care plan contracting, and perform a host of other activities. The vast majority of states will not be able to do so within the two-year timeframe envisioned here, especially considering the apparent lack of federal funding in the bill to support these critical activities,” said a statement from the National Association of Medicaid Directors, which represents state Medicaid directors from all 50 states.

Most analysts believe the bill would result in millions of people losing coverage, particularly because of the spending cuts to the Medicaid program, which covers many low-income and disabled individuals, including 2.8 million Pennsylvanians.

“Governors are not magicians. They can’t create a good system when they are being handed declining resources,” said Medicaid expert Joan Alker, executive director of the Georgetown University Center for Children and Families.

Gov. Tom Wolf, a Democrat who expanded Medicaid when he took office in 2015, opposes the bill, as he did previous Obamacare repeal efforts earlier this year. He is part of a bipartisan group of governors that have put forth proposals to shore up Obamacare.

“Due to the implementation of the Affordable Care Act (ACA) and Medicaid Expansion, Pennsylvania’s uninsured rate is at a historic low of 5.6 percent. If the Graham-Cassidy proposal is adopted, we know this positive trend will be reversed and the commonwealth’s uninsured rate will skyrocket,” Mr. Wolf wrote in a letter to Pennsylvania’s two senators.

He cited an analysis from Avalere Health, estimating Pennsylvania would lose $15 billion in federal funding by 2027 if Graham-Cassidy is passed. “This extreme shift in funding will result in a fiscal crisis beyond what Pennsylvania has experienced to date,” Mr.Wolf wrote.

“Our first reaction to this, when you talk about giving authority to the state — you aren’t really giving them the resources they need to come up with a system that would work for folks,” said Antoinette Kraus, director of advocacy group the Pennsylvania HealthAccess Network.

Her organization is hosting “people’s hearings” at Senate and congressional offices around the state on Monday.

“It took Massachusetts fouryears to set up a system after they passed [their 2006 landmark health care law]. You may recall the rollout of the ACA was not exactly smooth, and they had a plan. We would have to design a whole system, and given how dysfunctional Harrisburg is right now, it’s very hard to imagine this could happen,” said Marc Stier, director of the leftleaning Pennsylvania Budgetand Policy Center.’ HEALTH, FROM A-1