California Department of Health Care Services Preliminary Analysis of the AHCA

The California Department of Health Care Services (DHCS), released a preliminary fiscal analysis of the Medicaid provisions included in the House Republican repeal and replacement bill, the American Health Care Act (AHCA). According to the department, the federal proposal would result in nearly $6 billion ($4.3 B GF) in costs to California in 2020, increasing to $24.3 billion ($18.6 B GF) by 2027.

The department further highlights concern around additional cost pressures to California as the proposal moves away from the historical payment structure between the states and the federal government, into per capita spending limits. They estimate California would be responsible for $680 million in 2020, growing to $5.3 billion by 2027.  Additionally, the proposed construct of the enhanced match no longer being available to new Medi-Cal enrollees or those who have a break in coverage, would result in nearly all expansion enrollees being subject to the 50/50 cost share instead of the current enhanced match 90/10 cost sharing structure under the Affordable Care Act. They estimate the costs to be roughly $4.8 billion ($3.3 B GF) in 2020 increasing to over $18.5 billion ($13 B GF) in 2027.

In short, the department concludes that the AHCA represents a massive shift in costs to states, which will also increase the burden on the state safety net providers and potentially increase uncompensated care costs in the hundreds of millions and potentially billions each year.