President Obama’s new deficit reduction plan attempts to address concerns that blending the federal reimbursement rates for Medicaid and the Children’s Health Insurance Program (CHIP) would shift too much costs to the states by delaying its implementation until 2017 and producing a modest amount of savings relative to earlier versions of the plan. But some in Congress are still concerned that the greater cost shift to states would undermine the programs. Sen. Jay Rockefller (D-WV) — a strong proponent of both the Medicaid and CHIP — denounced the Obama’s modified blended rate proposal yesterday, saying it would devastate CHIP:

The proposal doesn’t specifically call for ending CHIP. But Rockefeller said that’s what would happen because CHIP would be a program where states could cut. Rockefeller was asked about the blended rate proposal when he stopped to talk to reporters after the Senate Democrats’ policy lunch Tuesday. “I hate it,” he said. Asked whether he still thinks it would kill CHIP, a prediction he made when the blended rate idea was floated earlier this year, Rockefeller said “it will do a very good job of that. Yeah, that would be my guess. Governors love CHIP until they have to start paying more for it.”

While the administration claims a blended rate would streamline and simplify the reimbursement formulas, states would receive less under a blended rate proposal because the federal government would average the reimbursement rates for all populations into a single rate. Rockefeller and other Medicaid advocates worry that this could signal the beginning of the end for CHIP. The Affordable Care Act requires states to maintain their current CHIP enrollment through 2019, but as CQ’s John Reichard reports, it “only funds them through 2015,” thus setting “the stage for a debate that year about how well the exchanges are doing in providing coverage and whether CHIP is really needed.”

Rockefeller characterized Obama’s cuts to Medicare and Medicaid as “hard” on seniors and the poor and said he would rather raise taxes on the wealthiest Americans. “You have to raise taxes. It isn’t a question of being a Democrat or of being a liberal. Or not being liberal. It’s just math,” he told Reichard.

Yesterday, Ohio’s lieutenant governor and state Department of Insurance released a report on the impacts of the Affordable Care Act. But rather than accurately portraying the findings of the study, the state’s Republican leadership cherry picked the results to justify its politically-inspired opposition to the law. “As I have been saying, the impacts of Obamacare will be widespread and expensive,” Lt. Gov. Mary Taylor pronounced in a press release. “This report clearly shows what I have long predicted; Obamacare will result in bigger government, unsustainable costs, and ultimately, less consumer choice“:

Specifically, Milliman’s report projects that individual premiums in Ohio could increase by as much as 55 to 85 percent in 2014. [...] Moreover, some individuals may see their premiums increase by 90 to 130 percent depending on their current health status, while others may see decreases. Those in the small group market (employers with 2 to 50 employees) are projected to experience average increases of 5 to 15 percent in 2014, not including yearly medical trend increases. However, some small groups may see increases of up to 150 percent, while others may see decreases of 40 percent depending on the group’s current health status.

In addition to significant changes to premium rates, more than 1 million Ohioans are expected to join the state’s Medicaid rolls in 2014 and more than 500,000 expected to join the government-subsidized individual exchange. Consequently, as many as half of all Ohioans could be enrolled in some type of government-subsidized health coverage, including Medicare, when Obamacare is fully implemented.

This is only half the story. Taylor fails to mention that the law will expand coverage to 790,000 Ohioans and picks out the premium increases without explaining that residents will receive far more comprehensive coverage from the state exchange and be eligible for premium subsidies that will significantly lower the costs of insurance. As the report says, the 55 to 85 percent estimated increases are “prior to the application of the premium tax credit subsidy”:

Prior to the application of the premium tax credit subsidy, the individual health insurance market premiums are estimated to increase by 55% to 85%… This is primarily driven by the estimated health status of the new individual health insurance market and the expansion of covered benefits. [...] This is attributable to today’s individual market having leaner covered benefits, such as the exclusion of maternity services, and a lower-cost population relative to the ESI markets.

“From the individual health insurance consumer’s perspective, premium rates may decrease for the households currently insured with income below 400% FPL since they will be eligible for premium and cost-sharing subsidies in the exchange,” Milliman concludes.

Under the Affordable Care Act, the federal government will also cover the full cost of expanding the state’s Medicaid program for two years and pay for the majority of the spending thereafter. That means that despite Taylor’s complaints, Ohio fares fairly well under the law: it benefits from the savings of expanding coverage to the poorest (and most expensive) residents, while the federal government picks up most of the tab.

Finally, it’s highly misleading for the state insurance department to argue that half of all residents will be enrolled in a public program by 2017, particularly since the law does not expand Medicare or offer a public option through the exchange (a system of “private competition” that Ohio Governor John Kasich supports). A more honest accounting — as reflected in Figure 4-1 of the report — finds that approximately 31 percent of non-elderly Ohioans will be enrolled in a public program:

In another sign that the Affordable Care Act is already lowering uninsured rates, a new Gallup survey finds that the share of adults 18-25 without health insurance has fallen from 28 percent to 24.2 percent. The numbers are one of the few bright spots in the current trend of increasing uninsured rates — driven by the poor economy — and speak to the success of the new health law, which requires insurers to extend dependent coverage to young adults until they turn 26. The provision went into effect last fall, but most companies implemented the measure at the beginning of January:

Census figures show nearly 35 million people are in the 18-25 age group, so Gallup’s 4 percentage-point drop would translate to an increase of roughly 1 million or more getting health insurance.

The Gallup findings are in line with other reports. A survey of employers this summer by Mercer, the benefits consulting firm, found a 2 percentage-point increase in health plan enrollment as a result of extending coverage to workers’ young adult children. Young adults are generally inexpensive to cover. Some companies have spread the extra premiums among their workforces.

Before the health care law passed, many employers automatically cut off dependents upon graduation from college or high school. Repealing Obama’s law, as Republicans seek to do, would eliminate the requirement for companies to provide extended coverage for young adults.

The Congressional Budget Office predicts that other age groups will experience similar decreases in uninsured rates as the Affordable Care Act begins to offer subsidized coverage beginning in 2014. Meanwhile, the Department of Health and Human Services plans to release its own report today about the insurance increases in the 18 to 25 age group. The recent Census report similarly concluded that the uninsured rate for 18 to 24 year olds decreased by 2 percentage points in 2010.