Senate’s health care bill will cost New York’s Medicaid program billions

Posted on Politico
Sen. Mitch McConnell is pictured. | Getty
New York was one of only two states to take advantage of the Essential Plan, also known as the Basic Health Plan, a program funded with the Affordable Care Act’s tax credits and cost-sharing subsidies. | Getty

ALBANY — The Senate’s version of the American Health Care Act would cost New York’s Medicaid program billions of dollars over the next decade, putting Albany in the position of having to choose between raising taxes or cutting services and programs for hundreds of thousands.

The bill, which is certain to change before coming to a vote, would also upend New York’s individual health insurance market, likely saddling many with higher deductibles and more expensive premiums.

“The Senate bill presented today, which was crafted behind closed doors by 13 men, would fundamentally harm Americans young and old, do severe damage to a fragile economy, and bankrupt state governments across the country,” Sen. Kirsten Gillibrand said in a statement. “The cuts to Medicaid in particular are galling. … To end the Medicaid expansion created under the Affordable Care Act is a cruel joke.”

The state’s Essential Plan, which enrolls nearly 700,000 New Yorkers in low-cost health insurance plans, likely would not survive in its current form because it relies on federal funding that would disappear. The program provides health insurance for $20 per month to those with incomes between 150 percent and 200 percent of the federal poverty level. Those with incomes below 150 percent of the federal poverty level, who do not qualify for Medicaid, receive health insurance with no premium.

New York was one of only two states to take advantage of the Essential Plan, also known as the Basic Health Plan, a program funded with the Affordable Care Act’s tax credits and cost-sharing subsidies. The cost sharing subsidies disappear in 2020 under the Senate’s version of the bill.

That would, on its own, be enough to severely handicap the Essential Plan but Republicans also propose prohibiting “lawfully present” immigrants from receiving tax credits. In New York, there are a couple of hundred thousand lawfully residing immigrants taking advantage of the Essential Plan. Without their tax credits, the state would have no method for funding their health insurance unless Albany decided to subsidize the insurance without federal help, a multi-billion dollar proposition.

A 2001 state Court of Appeals ruling requires that those residents, known as People Residing Under the Color of Law, receive Medicaid, which the state would once again have to pay for without any help from the federal government. That alone would cost the state $1.19 billion, according to an estimate from the state Department of Health.

On top of that, the Senate bill includes an amendment sponsored by Reps. John Faso and Chris Collins that would effectively prohibit the state from using county taxes to pay for the Medicaid program. That is expected to shift roughly $2.3 billion from county budgets to the state budget, and though it may ease the property tax burden in upstate New York, it will do nothing to ease the budget woes facing Albany in 2019.

The more severe Medicaid cuts would hit between 2020 and 2024, according to the Senate bill, which phases out the enhanced federal match states such as New York received from the federal government because of Obamacare.

In its place, there would be a per-capita cap assigned to each state. The per-capita cap would be based on what a state spent between 2014 and 2017, but high-cost states such as New York would see their per capita reduced by the secretary of Health and Human Services by as much as 2 percent.

Shoppers on the individual insurance market would see the value of their subsidies decrease. The Affordable Care Act pegged subsidies to a silver plan, which has an actuarial value of 70 percent, meaning insurers pay for 70 percent of the costs. The Senate version pegs subsidies to plans with an actuarial value of 58 percent. That will almost certainly mean New Yorkers who rely on subsidies will need to purchase skimpier plans with higher deductibles. Those who wish to buy the equivalent of silver plan will spend more out of their pocket on premiums.

The cutoff for income-based subsidies under the Senate plan is reduced to 350 percent ($42,210 for an individual) of the federal poverty level from 400 percent. Subsidies tied to the federal poverty level always hurt high-cost states such as New York where incomes tend to be higher than average, as does the cost of living. Basically, $43,000 goes a lot further in most other parts of the country so subsidies for health insurance aren’t as needed.

The Senate’s version is also worse for New York hospitals compared to the House version, according to the Greater New York Hospital Association, which pointed out that the House bill repeals the cuts to the Disproportionate Share Hospital program for Medicaid expansion states in 2020. The Senate does not, costing hospitals billions of dollars.

“It’s every bit as bad as the House bill. In some ways, it’s even worse,” Senate Minority Leader Chuck Schumer said Thursday on the floor of the Senate. “The president said the Senate bill needed heart. The way this bill cuts health care is heartless. The president said the House bill was mean. The Senate bill may be meaner.”

The state Department of Health would not provide an estimate of how many people with incomes between 350 and 400 percent of the federal poverty level buy plans on the exchange, although the state does collect income information.

The agency also declined to predict the total cost of the Senate’s bill on New York, or its effects on the Essential Plan, providers or insurers.

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This entry was posted in AHCA, American Health Care Act, Better Care Reconciliation Act, Cuomo, GOP, Health Care, Medicaid, Trump, trumpcare and tagged . Bookmark the permalink.

One Response to Senate’s health care bill will cost New York’s Medicaid program billions

  1. Pingback: New Senate health bill shows no love for New York | Resist and Replace

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