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New York will take huge hit in GOP health bill, experts agree

WASHINGTON – Gov. Andrew M. Cuomo sounds as if he is in a panic over the bill House Republicans plan to vote on Thursday to repeal and replace Obamacare.

And to hear health professionals and policy wonks in the state tell it, he has plenty of reason to panic.

The bill would force billions of dollars of additional annual costs onto the state. Thanks to an amendment from Rep. Chris Collins, R-Clarence, that includes $2.3 billion annually that upstate and Long Island counties now pay as their share for the Medicaid program.

And that's just the start. Health professionals in the Buffalo area noted that the bill would:

* Eliminate the 85 percent federal subsidy for the Essential Health Plan that serves low-income persons who don't qualify for Medicaid. That includes 10,183 people in the Buffalo-based district of Rep. Brian Higgins, D-Buffalo, and 8,224 in Collins' suburban/rural district.

* Replace the Obamacare subsidies that many New Yorkers receive to buy health insurance with a series of tax credits that would, partly because of quirks in New York State law, leave New Yorkers with far less government help.

* Result in a large number of newly uninsured New Yorkers who could impose new costs on hospitals.

Those facts combine to leave medical professionals, interests groups such as AARP and policy analysts agreeing on one thing.

"Undoubtedly, the bill in its entirety will cost New York a lot of money," said Bill Hammond, health policy director for the Empire Center, a fiscally conservative think tank in Albany.

And on top of that, in New York, "the bill has all kinds of bizarre effects." Hammond added.

It's still not clear whether the House Republican health bill, called the American Health Care Act, has the votes to pass in the House. Even if it does, it almost certainly would face dramatic changes in the Senate, where several Republicans have expressed either opposition to or qualms about the measure.

But as it stands, health experts agree that the legislation will hit New York first and foremost like a big unpaid bill.

Cuts in federal funding in the health legislation were projected to cost the state $2.4 billion a year before the Collins amendment, a figure that rose to $4.7 billion after House leaders agreed to the Collins plan.

Collins and Rep. John Faso, R-Kinderhook, argue that shifting Medicaid costs away from the counties will save the owner of a $200,000 home about $1,000 annually in property taxes. But Cuomo continued to insist Thursday that the state will pay dearly in other ways.

“Life has options and the hard reality is that Collins and Faso are leaving New York State with only two unacceptable choices," the governor said. "Either, we could pass on the devastating cuts to our hospitals, nursing homes and the 40 percent of New Yorkers who currently receive Medicaid and health benefits. Or, we would be forced to raise state income taxes – either by increasing taxes on all New Yorkers by 10 percent, or if Collins and Faso have their way in protecting only the wealthy, on the middle class by 26 percent."

Collins responded by accusing Cuomo of "using doomsday predictions to scare everyday New Yorkers into allowing Albany to continue taxing them to death."

"It’s absolutely disgusting the governor would threaten the middle class with a tax increase," Collins added.  "As I have said before, if this governor can’t find 1.5 percent to save in his budget, I am more than willing to find it for him.”


Aid to hospitals

Beyond the battle of words between the governor and the congressmen, health care professionals and their representatives worry that the health care bill would force New York State to cut its aid to hospitals, including its reimbursements under Medicaid, who provides health care to lower-income individuals.

"When New York is healthy, we are healthy," said Candace S. Johnson, president and CEO of Roswell Park Cancer Institute in Buffalo. "Other hospitals say the same thing ...Where's the state going to get all this money? That's my worry."

Executives at Kaleida Health, meanwhile, worry that reduced funding under the health bill will force its hospitals to cut back.

"If passed as is, it will directly impact patient care at Kaleida Health and across Western New York," said Michael P. Hughes, senior vice president for public affairs and marketing at Kaleida. "Clearly, we will have to make difficult choices regarding the services and programs that we currently provide. It appears that we will be impacted the greatest at Women & Children’s Hospital of Buffalo – a site where we treat the most vulnerable and those truly in need."


Aid to nursing homes

The state's nursing home operators face huge challenges under the bill, too, said Stephen B. Hanse, president and CEO of the New York State Health Facilities Association, which represents those facilities.

Noting that 75 percent of the state's nursing home patients are on Medicaid, Hanse said many nursing facilities already struggle financially – a struggle that could get worse if the states shoves the burden of the Medicaid cuts onto health facilities by reducing their reimbursements.

"Would this affect providers in a way that they couldn't afford to operate? It could," Hanse said.


Phasing out Medicaid expansion

Making matters even more murky is the fact that the GOP bill phases out the Medicaid expansion that New York and 30 other states adopted under Obamacare, which opened up the program to people earning just above the poverty line.

The phase-out of that program is the main reason the Protect Our Care Coalition, a pro-Obamacare group, projects that some 64,800 people in Higgins' district could lose their health care under the Republican plan. Some 58,000 people in Collins' suburban district could lose their insurance.

And the end of the Medicaid expansion is just one of the cutbacks in the GOP bill.

The bill would mean that the state would have to either pick up the tab for, or end, its Essential Plan. That health care option serves 700,000 New Yorkers who earn just a bit too much to qualify for Medicaid, but who otherwise might struggle to be able to afford insurance. Changes in the program would have to be made because under the Republican health bill, the state would lose the 85 percent federal subsidy it currently receives to fund the program.

The Essential Plan serves plenty of younger, healthier New Yorkers who helped stabilize the insurance pool by enrolling, said Jason Helgerson, New York State's Medicaid director.

"It's a hugely successful program" whose future is now in doubt, Helgerson said.

If the program ends, state budget figures show that more than 18,000 Western New Yorkers would have to go out to get insurance on their own. And several health industry experts said many of those people would not be able to afford to do so under the Republican health bill, which would dramatically cut the federal help that people now receive to buy their own health insurance.


Tax credits not subsidies

The GOP bill replaces the subsidies that those people receive under Obamacare with a series of tax credits that, in the end, would provide less help to most individuals.

In Buffalo, the average family receiving an Obamacare subsidy to buy insurance got $7,478 a year, according to WalletHub, a financial website that based its estimates on Kaiser Family Foundation data. Under the Republican Obamacare replacement, that same family would get a tax credit of $5,000 – which is $2,478 less than they got under Obamacare.

"The tax credits are not enough, and they don't target the people who need it the most," Helgerson said.

That's partly because the GOP plan bases those tax credits on both age and income. That works in states where insurers are allowed to charge older people more for their policies, but New York has a law that bars insurers from doing that. That creates a quirk in the system where older people in New York might get a tax credit for buying insurance that exceeds the cost of his or her policy.

"These age-based tax credits don't work in New York," said Hammond, of the Empire Center.

The switch from Obamacare subsidies to tax credits could make it more difficult for upwards of 10,000 people in Western New York to buy insurance, AARP New York said in an analysis of the health care bill.

“This legislation gives sweetheart deals to drug and insurance companies, and who pays for that? Older and lower-income Americans and the middle class – the ones who can least afford it,” said AARP New York State Director Beth Finkel.


Effect on emergency rooms

But hospitals would pay, too, and not just because they might receive less Medicaid money.

The increasing number of uninsured New Yorkers would show up at the state's hospital emergency rooms in need of care and with no way to pay for it, predicted Joseph D. McDonald, president and CEO of Catholic Health.

"We would have to rationalize how we pay for the care of that person," McDonald said.

Several sources noted, though, that some New Yorkers would benefit under the health care law. The state's wealthiest residents, for example, would benefit from the fact that the bill repeals every tax instituted to pay for Obamacare, including taxes on investment income and health insurance policies.

The Congressional Budget Office reported that more than 30 percent of the $883 billion in tax cuts in the bill would benefit the richest 2 percent of Americans. But Helgerson noted that some small businesses, such as tanning salons, would enjoy a tax cut as well.

"This is a massive transfer of wealth from working people to the wealthiest people in the country," he added. "But if you are a tanning salon owner, you are clearly better off under this bill."

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