25857060048_f7c028f8f0_m-3261139Governor Cuomo’s budget makes no major change in the Essential Plan—a low-cost state-sponsored health plan—despite the loss of almost $1 billion in federal aid.

Coverage for about 700,000 enrollees appeared to be at risk after the Trump administration halted certain subsidy payments under the Affordable Care Act, which accounted for nearly a quarter of the Essential Plan’s funding, or about $950 million.

But the governor’s executive budget indicates that the program will continue as-is—and sketches surprisingly easy-sounding ways of making up for the lost money.

The Essential Plan is an optional benefit under the ACA that only New York and Minnesota exercised. It covers people just above the eligibility cutoff for Medicaid, from 138 percent to 200 percent of the federal poverty level. To pay for the coverage, Washington sends New York State the money that otherwise would have spent on tax credits and other subsidies if those same people had enrolled for private coverage through an ACA exchange.

But a federal court ruled that money for one of those subsidy programs, known as cost-sharing reduction or CSR, had not been properly appropriated by Congress—leading Trump to cut off CSR payments in October.

Cuomo’s budget proposal holds out hope that Congress might still restore the original funding. In fact, it projects that overall federal aid for the Essential Plan will grow, thanks to formula-driven increases from other ACA sources. The governor’s financial plan even shows the state’s contribution for the $3.9 billion program shrinking to $102 million for fiscal year 2019, about a quarter of what was previously estimated.

If CSR is not restored, the financial plan says the state can at least partially offset the loss with refunds it is owed by insurers who manage the program, cuts to premiums going forward, and other measures. The state could also dip into a contingency fund that Cuomo wants to establish to backfill as a hedge against cuts in New York’s federal healthcare funding.

As proposed by Cuomo, that contingency fund would filled with proceeds from converting non-profit healthcare companies to for-profit status, along with new taxes on health insurers and opioid manufacturers.

The financial plan further reports surprisingly low enrollment numbers for the Essential Plan: 684,000 for the current fiscal year, growing to 689,000 in 2019. Just last month, the New York State of Health said 719,000 people had signed up for the program.

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

‘Clusters’ Drive a Widespread Surge in New York’s Coronavirus Infection Rates

New York's coronavirus infection rates have surged to their highest levels since May, pushing 10 counties – including Brooklyn, Rockland and Orange – above a threshold that the Cuomo administration uses to justify travel restrictions on other states. Read More

Not a Moment Too Soon, Bill de Blasio Is Setting a Good Fiscal Example

After months of flailing, floundering and stalling on desperately needed cuts to New York City's pandemic-ravaged budget, Mayor de Blasio just made a smart and appropriate move to save money—in the process defying one of New York's most powerful government employee unions. Read More

Cahill Charges Are An Indictment Of Cuomo’s Policies

Yesterday’s indictment of the state’s top construction union official on federal corruption charges raises a big question: if private companies are paying bribes to avoid having to work with certain construction unions, why is Governor Cuomo insisting that the state keep doing it? Read More

A Federal Emergency Rule Is Inflating New York’s Medicaid Enrollment

Strings attached to federal coronavirus relief funding appear to be inflating New York's Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits. Read More

New York State Has Dug Itself Into Its Deepest Hole On Record

"State's Financial Hole Deepens" is the headline on Comptroller Thomas DiNapoli's press release accompanying the August cash flow report. Read More

The CDC’s Nursing Home Death Count Is Even Less Complete Than New York’s

The result is that a major public health disaster affecting New York's nursing home residents is not being accurately documented by either of the agencies responsible for protecting them – because state officials are refusing to share the true numbers, and federal officials haven't yet asked for them. Read More

New Yorkers Paid Less in Federal Taxes in First Year of New Federal Tax Law

Federal income taxes paid by New Yorkers decreased by nearly $3.4 billion in 2018, the first year of the new federal Tax Cuts and Jobs Act (TCJA), according to newly released Internal Revenue Service data. Read More

The DOJ’s Probe of Coronavirus in Nursing Homes Appears to Leave Out Most Victims

The U.S. Justice Department's newly announced inquiry into coronavirus in New York's nursing homes comes with a crucial caveat: It will look only at government-operated facilities, which represent a small fraction of the state's nursing-home industry. 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
Fax: 518-434-3130
E-Mail: info@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.