CHA News Article

Report Examines State Flexibility to Address AHCA Challenges

A new issue brief released by the Kaiser Family Foundation examines the American Health Care Act’s (AHCA) proposed “Patient and State Stability Fund,” designed to offset a portion of the federal health care payment reductions that would leave fewer people covered and more people with higher out-of-pocket costs. According to Congressional Budget Office (CBO) estimates, the AHCA would dramatically reduce federal spending on health coverage between 2018 and 2026, lowering federal contributions to Medicaid by $834 billion and subsidies for non-group health insurance by an additional $290 billion. Overall, CBO estimates that the AHCA changes would result in an additional 23 million people being uninsured in 2026. The Patient and State Stability Fund would provide states up to $123 billion between 2018-26 for a number of purposes, including reducing premiums or increasing benefits in the non-group market.

Additionally, the bill appropriates $15 million toward a federal invisible risk sharing program, which states would have the option of administering. However, because these options would not completely offset spending reductions, states would likely rely on modifying insurance provisions through waivers, including those that would extend rate variation due to age, modify essential health benefits or permit insurers to use an applicant’s health as a rating factor for certain individuals applying for coverage.