State Analyst: Maryland Might Lose $1.4 billion under Health Care Repeal

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A federal repeal of the national health care law could cost Maryland $1.4 billion in the 2018 fiscal year, state budget analysts said Tuesday.

Funds issued to Maryland through the Affordable Care Act include $1.2 billion of enhanced federal funding to cover Medicaid, David Romans, fiscal and policy analysis deputy director for the Maryland Department of Legislative Services, told the House of Delegates Ways and Means Committee.

“Roughly 312,000 people (in Maryland) will receive coverage in fiscal (year 2018) through that ACA expansion,” Romans said. Maryland’s Affordable Care Act expansion widens the range of income levels to help cover more adults.

Romans said if the Affordable Care Act is repealed, the state would need to decide to either drop the coverage or to make up the $1.2 billion for Medicaid and an additional $200 million for other related services.

The federal government now covers about 95 percent of funding for Medicaid, but if the federal health care law is repealed, it could be reduced to 50 percent, Romans said.

“There is a lot of unknowns around federal spending in Maryland,” he added.

“The 2018 (proposed) budget assumes 312,000 individuals enrolled under the ACA Medicaid expansion provision will receive full physical and behavioral health care coverage benefits at a total cost of care of $2.8 billion,” according to the Department of Legislative Services.

Included in the estimated $1.4 billion in cuts, the state could lose $200 million allocated for the Maryland Children’s Health Program, additional pharmacy rebates, and waivers for the all-payer rate-setting hospital system, which creates a consistent price for all insurers for specific procedures.

Romans told lawmakers that the repeal of the Affordable Care Act is the state’s “greatest vulnerability in terms of loss in federal dollars.”

The committee’s vice chair, Delegate Frank Turner, D-Howard, said he hopes Gov. Larry Hogan, a Republican, is looking carefully at the impact losing that amount of money would have on the state.

Hogan met with the state’s federal delegation Monday hoping to “put politics aside and find a solution to the (Affordable Care Act) issue,” according to Doug Mayer, a spokesman for the governor.

“We’re not going to speculate on what may happen,” Mayer said. Mayer specified there are aspects of the federal health care law the governor agrees with and aspects he doesn’t.

“Keep the good and get rid of the bad,” he said. The good including young adults being able to stay on their parents’ insurance plans longer and the bad including skyrocketing rates, according to Mayer.

Aside from the estimated $1.4 billion, Maryland’s Health Benefit Exchange, which covers about 60,000 households, could also lose funding if the Affordable Care Act is repealed, according to Romans. The Department of Legislative Services estimates program’s federal support to be about $225 million.

The state’s Supplemental Nutrition Assistance Program, also referred to as SNAP, which currently receives about $1 billion in federal dollars, is also at risk of losing funding if the health care law is repealed, according to Romans.

Warren Deschenaux, executive director of the Department of Legislative Services, told the University of Maryland’s Capital News Service that “the biggest concern (in the budget) is that it does very little to resolve the problems for the future.”

Deschenaux said he anticipates a $400 million to $500 million budget gap that will continue to increase in the future, despite the consideration of the Affordable Care Act repeal.

By Cara Newcomer

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