NJ Spotlight

ACA Repeal Would Impact 1M NJ residents, Saddle State with $4B Annually

Obamacare is more than insurance coverage for the poor and for seniors, it's also a matter of life and death for some New Jerseyans

NJ Spotlight — February 22, 2017

By Lilo H. Stainton

Repealing the federal Affordable Care Act would have a direct impact on more than 1 million New Jersey residents — and could even kill nearly 800 of them over the next 12 years — while saddling the state with some $4.2 billion annually in additional costs, according to new data released Tuesday by advocates seeking to preserve the landmark law.

The latest report from New Jersey Policy Perspective notes that the law benefitted 212,000 Garden State seniors by reducing the cost of prescription drugs not covered by Medicare, while also enabling roughly 800,000 low-income people to obtain health insurance through Medicaid or the private insurance market. Without this coverage, dozens of these individuals would likely die each year, the authors found. The state would also lose billions in annual federal funding if the law is rescinded and, with less money available for healthcare, 86,000 jobs would disappear.

While not often considered ACA beneficiaries, these seniors are among more than 11 million Medicare patients nationwide who saved a total of $23.5 billion over the past seven years on prescription drug costs, according to an analysis by the AARP. Medicare pays most prescription costs, but not all, and some patients left in this "donut hole" were forced to spend thousands out of pocket for medicines. The ACA helped bridge this gap — saving this group of New Jersey seniors an average of $1,200 a year — and would have eliminated the "donut hole" entirely by 2020.

By covering these prescription costs, the ACA also reduced the burden on New Jersey's Prescription Assistance for the Aged and Disabled program, a longstanding effort to help seniors afford their medication, explained NJPP's Ray Castro, who did the analysis. State funding for PAAD has declined from $230 million in 2009 to $70 million this year, he said, despite a 10 percent growth in the senior population.

Full impact of ACA on state healthcare system

While NJPP, a progressive organization that has tracked the program for years, has released similar data in recent months, the new report is the first to look at the full impact of the ACA on the state's healthcare system, budget picture, and larger economy. The report also drilled down to the county level — with details on patients impacted, potential deaths, funding loss, and other economic impacts — providing what some advocates said could well be the most detailed analysis of the law's impact available nationwide.

"The more we learn about the repeal of the ACA, the more we learn how harmful it would be," Castro said, noting that some of the benefits lost, "could be the difference between life and death."

Advocates unveiled the new findings as part of their growing campaign to convince Republican Congress members to oppose efforts by GOP leaders and President Donald Trump to "repeal and replace" the ACA, or Obamacare, the controversial 2010 law that has become increasingly popular in recent months as threats of its rollback have begun to take shape. Congress approved a budget resolution designed to pave the way for a repeal in mid-January and, on his first day in office, Trump signed an executive order demanding his administration begin that process. But despite pledges that the law would be replaced and coverage would be maintained, it is not clear what the federal government intends to do next.

The threat of repeal has prompted new interest in the program among citizens, including those in New Jersey, who signed up in strong numbers during the recent enrollment period. It has also sparked outrage among the state's Democratic leaders — both in federal and state government — and for advocates. The New Jersey for Health Care Coalition, an alliance of business, labor, and healthcare advocates led by New Jersey Citizen Action, has organized weekly vigils that have attracted hundreds of participants to the offices of the state's Republican congressmen, whose votes could be the key to preventing the law's destruction.

"This issue impacts everyone, regardless of where you live or your party affiliation," explained Maura Collinsgru, Healthcare Program Director for Citizen Action. In addition to those who received health insurance directly, she said millions more benefitted from the ACA's regulatory changes that improved the quality or availability of commercial coverage — by enabling those with preexisting conditions to obtain insurance, enabling young adults to stay on a parent's policy until age 26, and requiring full coverage for behavioral health services, among other changes.

Citizen Action and its Coalition For Healthcare partners are also working with state and local governments to pass resolutions urging Congress not to repeal the law. So far, Hudson, Mercer, Essex, and Union counties have adopted the measure, as has Jersey City, Collinsgru said. Resolutions are pending in Burlington, Ocean, and Somerset counties, she added, and the coalition hopes to have the proposal introduced in the state's remaining county governments in the coming months.

While the vast majority of the federal funding associated with the ACA flows directly to the state to pay for Medicaid services (approximately $3 billion annually), repealing the law would also have a significant fiscal impact on county and local governments, Castro said. These entities would be forced to find new ways to fund public health programs to help fill the treatment gaps for those who stand to lose Medicaid (550,000 residents) or individuals who purchased plans from the ACA marketplace (nearly 300,000), who might be priced out in the future.

"Much of the fiscal burden will be shifted to localities," Castro added. "That's where the rubber meets the road."

Healthcare providers, and hospitals in particular, are also bracing for the impact of a repeal. Hospital systems agreed to trade massive cuts in other federal funding streams to support the ACA, which has enabled them to get paid — through Medicaid — for the care they provide to patients who formerly had no insurance. And concern about the future is already taking a toll on what options they can offer patients, officials said.

Peter A. Kaprielyan, vice president of government and external relations at Inspira Health Network, which operates three acute-care hospitals and other services in Cumberland, Gloucester, and Salem counties, said the network has already lost $40 million in funding over the past few years and stands to lose $30 million more if the ACA is dismantled without a true replacement.

"Just imagine that across the state and across the nation," Kaprielyan said. "There's no doubt [hospitals] will be thinking about what programs they can put on hold, what programs they discontinue."

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