State executive budgets reveal that Democratic and Republican governors and legislative leaders are concerned about the far-reaching effects of anticipated changes to federal healthcare policy under the Trump administration, according to a new Fitch Ratings report.
Many state leaders have said that the expected policy changes -- chief among them repeal of the Affordable Care Act -- would have a substantial effect on their budgets. States have the power to adjust, the report said, but success depends on what action the federal government takes.
"Significant federal changes are likely, fundamentally altering federal healthcare policy and requiring substantial fiscal and policy shifts by states," said Fitch Director Eric Kim in a statement.
Both Medicaid expansion and non-expansion states face challenges under a potential repeal of 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.
Local governments also face risks, notably reduced K-12 funding, revenue-sharing programs, and social service support due to over-extended state healthcare funding responsibilities. They may also be forced to assume higher Medicaid, healthcare facility and retiree healthcare costs.