The finding is based on state executive budgets.
“Many state leaders note that the expected policy changes could materially affect their budgets. While states have extensive power to adjust, success depends largely on what actions the federal government takes,” Fitch director Eric Kim said in a prepared statement.
“Significant federal changes are likely, fundamentally altering federal healthcare policy and requiring substantial fiscal and policy shifts by states.”
One potential change relates to the ACA’s Medicaid expansion. Both President Trump and Republicans have proposed giving states more control over Medicaid by converting the program to block grants. Fitch notes Medicaid expansion and non-expansion states face challenges under a potential repeal of the ACA. “Expansion states face fiscal and policy issues, while non-expansion states could be forced to increase charity funding and support high risk insurance pools if the state exchanges are upended,” the agency said.
Fitch said local governments also face risks if the health law is repealed. Specifically, the agency cited reduced K-12 funding, revenue-sharing programs and social service support “due to over-extended state healthcare funding responsibilities.” Fitch said local governments may also be forced to take on higher Medicaid, healthcare facility and retiree healthcare costs.
Click here to access the full report titled “Governors React Warily to Federal Healthcare Changes.”
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