capital-1-pic-copy-300x178-4434805The House Republicans’ American Health Care Act would jeopardize coverage for hundreds of thousands of New Yorkers and eventually cost the state government billions of dollars. On the whole, however, it’s far less disruptive than previous GOP alternatives to Obamacare.

With respect to Medicaid, the bill would preserve the status quo through the end of 2019. After that, everyone currently enrolled could stay enrolled, including hundreds of thousands who became eligible under the ACA’s Medicaid expansion, and the state would continue receiving enhanced aid for that population.

However, new enrollees in the expansion population (mostly adults with incomes between 100 percent and 138 percent of the federal poverty level) could no longer sign up for Medicaid after January 1, 2020. Thus, barring a state-financed alternative, the number of New Yorkers covered by that program would likely decline over time.

The state would eventually lose $4 billion in enhanced Medicaid funding under the expansion, but gradually through attrition.

Going forward, the state’s federal aid would be subject to a per-enrollee cap, but it’s one that New York is unlikely to hit in the near future. The cap would be trended forward by slightly more than the Consumer Price Index for medical services, which has been growing faster than per-capita Medicaid spending for most of the past two decades.

Another group affected by the bill are the 100,000 or so New Yorkers, ranging from 200 percent to 400 percent of the poverty level, who have bought private health insurance with the help of the ACA’s income-based tax credits. The GOP bill would instead offer age-based tax credits, ranging from $2,000 for people under 30 to $4,000 for people over 60.

This switch would likely have a mixed effect, making coverage less affordable for younger, poorer customers, but more affordable for older customers higher on the income scale.

For New Yorkers above 400 percent of the poverty level, who received no subsidies under the ACA, the GOP plan would be a positive. They would qualify for full tax credits up to $75,000 in income, phasing down after that.

A major question mark is the fate New York’s Essential Plan – a very low-cost, government funded health plan open to people between 138 percent and 200 percent of poverty. An optional benefit under the ACA, which only New York and Minnesota took up, the New York program is mostly financed with $3.7 billion in federal funding and covers more than 600,000 people.

Republicans were expected to abolish the program as part of any repeal-and-replace plan. However, it was hard to tell from the legislative language when and if the program would end.

If so, some of its enrollees would transfer to Medicaid at a cost of about $1 billion to the state. Others could try to buy coverage with tax credits.

Another potential glitch for New York is a provision of the GOP bill which says tax credits cannot be used to buy insurance that covers abortion. That would potentially run afoul of a New York regulation that requires most plans to cover abortion.

Other provisions of the American Health Care Act would repeal or delay various ACA taxes, which will means millions of dollars in relief for higher-income individuals, insurance companies, medical device manufacturers, and employers that offer high-cost health plans, among others.

The bill also includes a 10-page section aimed at making sure lottery winners do not receive Medicaid benefits.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

New York’s Medicaid costs are soaring at double-digit rates

New York's already high Medicaid spending is growing at a double-digit rate for the second year in a row, recently released state figures show. After dipping during the first year o Read More

As the session winds down, watch for health costs to go up

The closing days of the legislative session could prove costly for New York health insurance consumers as lawmakers push a raft of proposals that would make coverage more expensive, harder to find, or both. Read More

Minimum wage for home care aides is likely to mean bigger raises for downstate than upstate

The newly enacted wage hike for home care aides is likely to increase workers' pay more than three times as much in the New York City area as in other parts of the state, according to a review of labor data. Read More

The flawed arguments behind ‘Fair Pay for Home Care’

As they contemplate a major increase in Medicaid spending on home care for the elderly and disabled, state legislators are relying on information that's outdated, incomplete or inaccurate – and neglecting to think through the predictable consequences. Read More

The debate over Medicaid home-care funding needs a reality check

The push in Albany to boost wages for home health aides is seemingly disconnected from the larger realities of the state’s long-term care system. As they , officials in the home care industry are warning that the state faces an of in-home caregivers Read More

Answers needed on Governor Hochul’s health-care budget

The health-care agenda laid out by Governor Hochul in her budget proposal this week leaves a lot of questions unanswered. Here are a few of them. Read More

Putting Governor Hochul’s $10 billion health-care ‘investment’ in context

In her State of the State address this week, Governor Hochul prominently called for a $10 billion "multi-year investment" in the state's health care system, including $4 billion earmarked for wages and bonuses, with a goal Read More

Hochul faces a test on health insurance costs

With judicious use of her veto pen this month, Governor Hochul could draw a line against spiraling health expenses for consumers and taxpayers. Several health insurance-related bill Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!