How the latest Obamacare repeal bill would affect New York State

The legislation that Senate Republicans hope to pass next week in a last-ditch effort to dismantle Obamacare would strip away some of the federal funds sent to New York and other states for expanding Medicaid – and give them to the states that didn’t.

The conversion of Affordable Care Act funds into state block grants from 2020 to 2026 is one key part of the bill that Senate Republicans will bring up for a vote by the end of the month, before the expiration of special budget rules that allow passage by a simple majority.

How New York State would be affected

The bill would put the ACA’s financing for subsidized private health insurance and Medicaid expansion into a giant pot and redistribute it among states according to new formulas.

New York would lose $45 billion under the bill’s conversion of Affordable Care Act funds into state block grants from 2020 to 2026, the Avalere consulting firm said.

The Center for Budget and Policy Priorities, a think tank that favors the current health law, said New York State would lose $18.9 billion in 2026 alone.

Here’s a look at the 10 states that would lose the most in federal funding if the bill becomes law:


How New York leaders have responded

Supporters of the bill say governors and state legislatures would have broad leeway on how to spend the money, and could also seek federal waivers allowing them to modify insurance market safeguards for consumers. For example, states could let insurers charge higher premiums for older adults.

But with that flexibility also comes the challenge of fixing a broken health care system with less money, a task that New York Gov. Andrew M. Cuomo and at least 10 other governors have publicly rejected.

“I would not trade $19 billion for the flexibility. Because if they cut us $19 billion, if I was as flexible as a Gumby doll, we could not fund our healthcare system,” Cuomo said. “It also puts 2.7 million New Yorkers at risk of losing their health insurance.”

The bill also repeals requirements that individuals buy health insurance and employers offer it, ends subsidies to help people pay premiums, cuts off funding for Medicaid expansion, and makes significant cuts as its reshapes Medicaid.

“They are designed, these cuts, to hurt states that have expanded Medicaid,” Cuomo said. “To penalize us for doing a better job than other states is a gross unfairness.”

Residents of New York and California, which expanded Medicaid and set up insurance marketplaces, had fared better than people living in Texas and Florida, which opted out of both, according to a March 2017 study by the Commonwealth Fund, which studies health issues.

If the bill passes in the Senate, it faces a difficult path in the House, said Rep. Peter King (R-Seaford), who opposes the bill because of the funding cuts for New York.

To penalize us for doing a better job than other states is a gross unfairness.

– Gov.
Andrew Cuomo

How other states would be affected

The bill would lead to an overall $215 billion cut to states in federal funding for health insurance, through 2026. Reductions would grow over time.

A reduction in federal subsidies for health insurance likely would lead to more people being uninsured, said Caroline Pearson, a senior vice president at Avalere, which specializes in health industry research.

Thirty-four states would see cuts by 2026, while 16 would see increases. Among the losers are several states that were key for President Donald Trump’s election, including Florida, Pennsylvania, Michigan, and Ohio.

California would lose $78 billion, while Texas and Georgia would gain $35 billion and $10 billion, respectively.

“If you’re in a state which has not expanded Medicaid, you’re going to do great,” said Cassidy. “If you’re a state which has expanded Medicaid, we do our best to hold you harmless.”

What else would the bill do?

Named for the bill’s sponsors, Sens. Lindsey Graham (R-S.C.), and Bill Cassidy (R-La.), the bill would repeal much of the Obama-era Affordable Care Act and limit future federal funding for Medicaid. That federal-state health insurance program covers more than 70 million low-income people, ranging from newborns to elderly nursing home residents.

Independent analysts say the latest Senate Republican bill is likely to leave more people uninsured than the Affordable Care Act, and allow states to make changes that raise costs for people with health problems or pre-existing medical conditions.

The Congressional Budget Office has said it doesn’t have time to complete a full analysis of the impact on coverage before the deadline.

How would Medicaid spending be affected?

Compared to current projected levels, Medicaid spending would be reduced by more than $1 trillion, or 12 percent, from 2020-2036, a study by consulting firm Avalere found. Earlier independent congressional budget analysts said such Medicaid cuts could leave millions more uninsured.

Here’s how else the bill compares

Medicaid expansion

Current: States have the option to expand Medicaid to cover more low-income adults, with the federal government picking up most of the cost.

Senate bill: Ends the federal match for Medicaid’s expansion; ends program’s status as an open-ended entitlement, replacing it with a per-person cap.

Health status-based rates

Current: People cannot be denied coverage due to pre-existing medical problems, nor can they be charged more because of poor health.

Senate bill: Prohibits denying coverage to those with pre-existing condition, but states can seek waivers to let insurers charge more based on health status in some cases.

Subsidies for insurance

Current: Provides income-based subsidies to help with premiums and out-of-pocket costs such as deductibles and copayments; subsidy benchmark tied to mid-level “silver” plans.

Senate bill: Replaces income-based subsidies with block grants to states for health care programs; ends cost-sharing subsidies in 2020.

Standard health benefits

Current: Requires insurers to cover 10 broad “essential services” such as hospitalization, prescriptions, substance abuse treatment, preventive services, maternity and childbirth.

Senate bill: Allows states to seek waivers from the benefits requirement as part of the block grant program.

Coverage mandate

Current: Requires those deemed able to afford coverage to carry a policy or risk fines from the IRS; requires larger employers to offer coverage to full-time workers.

Senate bill: Repeals coverage mandate by removing tax penalty beginning with the 2016 tax year.

Planned Parenthood

Current: Planned Parenthood is eligible for Medicaid reimbursements, but federal money cannot fund abortions.

Senate bill: Planned Parenthood would face a one-year Medicaid funding freeze.

Sources: Department of Health and Human Services, Kaiser Family Foundation

WITH WASHINGTON POST

How the GOP health-care bill could affect you

the bill's main points

Mandate vs. choice

  

The mandate that every individual get health insurance or pay a penalty to offset health-care costs would be eliminated. Also, large employers would no longer have to cover workers or face a penalty if they don’t.

Philosophically, this is the crucial hinge for many Republicans: switching from mandates to choices.

“It comes down to whether you want government playing a predominant role in determining what (health care coverage) should be offered in or whether you think (insurers) should be allowed to offer plans” that fit the market, said Rep. John Faso (R-Kinderhook), the lone New York Republican on the House Budget Committee. “The ACA represents a centralized approach. The Republican approach lets the market work and lets individuals decide what to buy.”

Tax credits:

The Republican plan would replace Obamacare tax credits with a different kind of tax credit. In short, Obamacare provided tax credits based on incomes and costs of policies; the GOP would base it on age. Further, the GOP would cap the maximum credit at $4,000 for people 60 years old or greater; under Obamacare, the credits could be $10,000 or more.

Enrollment and premiums:

The Congressional Budget Office projected that health-care premiums would spike 20 percent for those buying in the individual market during the first 10 years, but decline by 10 percent overall in a decade. But again, individual circumstances can vary widely.

Medicaid:

 

The GOP plan would keep federal funding of Obamacare’s Medicaid expansion through 2020, but halt it after that. The expansion had allowed people who earned just enough money to be excluded from Medicaid to join it. That will end. People in this income category will be among those most affected, in the future, by the proposed changes.

Popular elements of Obamacare:

 

The GOP would keep some key parts of the ACA that are popular: Insurers wouldn’t be able to deny coverage to people with pre-existing conditions; children would be able to stay on their parents’ policies until age 26; insurers can’t cap annual or lifetime medical expenses.

Women’s health issues:

The GOP would freeze Planned Parenthood funding for one year. The organization gets nearly half its funding from the federal government, according to Associated Press, and the aid doesn’t pay for abortions but rather other services such as birth control and treatment of sexually transmitted diseases.

Further, the GOP plan prohibits the use of tax credits to purchase any health plan that covers abortions.

Mental health, substance abuse:

For the 31 states that expanded Medicaid under Obamacare (including New York), the GOP plan would eliminate (in 2020) the requirement that Medicaid cover mental-health and substance-abuse treatment. That doesn’t mean states won’t continue to cover those services, but they will be among the mix of coverage choices.

Some Democrats and some health-policy groups view this as a “major retreat” from substance-abuse treatment.

on family insurance

You’ll be able to stay on your parent’s policy until age 26. The GOP would keep this popular provision of the ACA.

Also read the section for ANY age to learn more about possible changes in coverage.

on employer insurance

If you get health insurance through your job, the GOP plan would not have a huge effect on you, said Bill Hammond, a health-care policy analyst at the Empire Center.

The overwhelming majority of companies provide health insurance because it is part of the traditional package to attract employees or “because they think it’s the right thing to do,” Hammond said. The removal of the penalties likely won’t spur companies to suddenly drop coverage.

That said, companies could alter what their policies cover based on how the market shakes out. The Congressional Budget Office projected that up to 7 million fewer people would be covered through work-offered insurance by 2026 because companies no longer face a penalty. Republicans called that estimate overstated.

Also read the section for ANY age to learn more about possible changes in coverage.

buying insurance


 

Like the ACA, the Republican plan primarily affects those who must buy insurance on their own — especially young adults and senior citizens. And the impact depends on a person’s circumstances.

If you are a Long Islander who is 27 (no longer covered by your parent’s policies) and you are earning less than $50,000, you’d fare better under Obamacare. If you were earning more than that (up to $75,000), you’d fare better under the GOP plan.

But it’s not just tax credits that would change, it’s likely premiums would too. Younger individuals likely would see lower insurance premiums. That’s because the GOP plan, according to supporters, recognizes that young people have fewer health costs and should pay less.

Also read the section for ANY age to learn more about possible changes in coverage.

on employer insurance

If you get health insurance through your job, the GOP plan would not have a huge effect on you, said Bill Hammond, a health-care policy analyst at the Empire Center.

The overwhelming majority of companies provide health insurance because it is part of the traditional package to attract employees or “because they think it’s the right thing to do,” Hammond said. The removal of the penalties likely won’t spur companies to suddenly drop coverage.

That said, companies could alter what their policies cover based on how the market shakes out. The Congressional Budget Office projected that up to 7 million fewer people would be covered through work-offered insurance by 2026 because companies no longer face a penalty. Republicans called that estimate overstated.

Also read the section for ANY age to learn more about possible changes in coverage.

buying insurance

Like the ACA, the Republican plan primarily affects those who must buy insurance on their own – especially young adults and senior citizens. And the impact depends on a person’s circumstances.

If you are a 40-year-old Long Islander and your income is $30,000, you’d be eligible for $3,000 in tax credits under the GOP plan and $3,930 under Obamacare, according to Kaiser. That same person earning $75,000 in income would fare better under the GOP plan because his income level is too high to get any tax credits under Obamacare. (If that person earns $100,000 or more, he/she could get just $500 in tax credits in the GOP plan.)

But it’s not just tax credits that would change, it’s likely premiums would too. The CBO projected that premiums for a 40-year-old are likely to decrease.

Those who currently earn too much to qualify for Medicaid or Obamacare subsidies likely would fare better under the GOP plan. For example, a 40-year-old who earns $68,200 annually would pay $6,500 in premiums under Obamacare but $2,400 under the GOP plan.

Also see changes for ANY age to read more about changes that could affect your coverage.

on employer insurance

If you get health insurance through your job, the GOP plan would not have a huge effect on you, said Bill Hammond, a health-care policy analyst at the Empire Center.

The overwhelming majority of companies provide health insurance because it is part of the traditional package to attract employees or “because they think it’s the right thing to do,” Hammond said. The removal of the penalties likely won’t spur companies to suddenly drop coverage.

That said, companies could alter what their policies cover based on how the market shakes out. The Congressional Budget Office projected that up to 7 million fewer people would be covered through work-offered insurance by 2026 because companies no longer face a penalty. Republicans called that estimate overstated.

Also read the section for ANY age to learn more about possible changes in coverage.

buying insurance

If you a Long Islander 60 or older and your income is $30,000, it’s essentially a wash: you’d be eligible for $4,000 in tax credits under the GOP plan and $3,930 under Obamacare, according to Kaiser. That same person earning $75,000 in income would fare better under the GOP plan because his income level is too high to get any tax credits under Obamacare. (If that person earns $100,000 or more, he/she could get just $1,500 in tax credits in the GOP plan.)

But it’s not just tax credits that would change, it’s likely premiums would too.
Persons 60 or older who are buying on the individual market likely would see premiums rise. Under Obamacare, insurers could charge older adults up to 3 times as high as young adults. The GOP would change that ratio to 5-to-1.

For example, the CBO said that a 64-year-old with a $26,500 income would pay $1,700 in premiums in 2026 under Obamacare – but a whopping $14,600 under the GOP bill.

changes for employers, insurers

 Most of them would go away. The GOP would eliminate the mandate penalty, fees on insurers and prescription drug manufacturers, taxes on the sales of certain medical devices, a surcharge on investment incomes and the 10 percent tax on indoor tanning services.

But, importantly, the GOP would keep the so-called Cadillac tax. Scheduled to begin in 2020, this Obamacare provision would impose an excise tax (paid by insurers and employers, not individuals) on health plans that cost more than $10,200 for individuals and $27,500 for families. The GOP would delay the phase-in by five years.

Supporters say the tax is a governor on health-care spending. Some Republicans, though, want to kill all the taxes imposed by Obamacare.

“My view is this: After spending seven years talking about the harm being caused by these taxes, it’s difficult to switch gears now and decide that they’re fine so long as they’re being used to pay for our healthcare bill,” Sen. Orrin Hatch (R-Utah) told The Hill.

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