After Obamacare: What are New York’s options if the Affordable Care Act is repealed?

Then-President Barack Obama prepares to deliver a statement about the Supreme Court ruling the Affordable Care Act constitutional in June 2012. Congressional Republicans have now vowed to repeal the ACA.

Credit: Pete Souza/White House

When President Barack Obama signed into law the Affordable Care Act in 2010, New York embraced the landmark health care legislation, which featured several policy changes the state had already implemented on its own.

Seven years later, with President Donald Trump’s administration and congressional Republicans pushing for a full repeal of Obamacare and questions about what might replace the law, how well is New York positioned to deal with the fallout?

While New York residents may be more insulated from federal moves that might eliminate various rules and regulations, experts say the state would be hard hit by the financial burden of a repeal. State officials are uncertain how to prepare for a repeal until it happens, but New York could eventually be confronting the potential loss of billions of dollars in federal funding and the possibility that millions of residents will no longer have health insurance.

Before the state adopted the ACA, the state had already passed laws that were ultimately included in the federal legislation, such as barring insurance companies from denying coverage to those with pre-existing conditions. However, the state had a miniscule individual insurance market with high premiums, due to the low participation. The market was greatly expanded with federal funding from the ACA that New York is now in danger of losing.

A report released by the governor’s office predicts a loss of federal funding due to a repeal of the ACA could cost the state roughly $3.7 billion and more than 2.7 million New Yorkers would lose their health insurance.

“The bottom line is ... that there will be less comprehensive coverage for consumers in the future, fewer people will be covered, it will destabilize the health industry.” – Bea Grause, president of the Healthcare Association of New York State

“We have a few programs that we are outliers on,” state Sen. Kemp Hannon, the chairman of the state Senate Committee on Health, said at a City & State event in February. “One is called the Basic Health Plan, they changed the name to the Essential Health (Plan). We get a lot of money from that and we are one of two states that opted to take the Essential Health Plan. We also receive a significant portion of money for graduate medical education. We’re not one of two there, but we’re still an outlier. The third was I was worried about the Disproportionate Share (Hospital) Payments. Those have been reduced when ACA was enacted on the theory that uninsured (patients) would be covered by the ACA, and it negates the need for that.”

Helen Schaub, state policy and legislative director for 1199SEIU United Healthcare Workers East, said that while an individual insurance market did exist in New York before the ACA, it was seldom used.

“Before the ACA, there was basically no individual insurance market in New York,” Schaub said. “There was only about 23,000 people because there weren’t any subsidies and so insurance companies, knowing they were going to have to write you a policy no matter your health condition, they charged very high premiums and the vast majority of people in the individual market could not afford that.”

According to the state Department of Health, New York’s individual insurance market has increased by 270 percent, from about 136,000 individuals in 2013, including about 20,000 people in the direct pay market, to about 367,000 in 2016 under the ACA. About 2.8 million people total were enrolled in plans through New York State of Health, the state’s insurance marketplace, in 2016.

If the ACA is repealed, the state might return to institutional subsidies, such has the Disproportionate Hospital Share Payments, which were in place before the ACA was enacted. The state dropped these subsidies in exchange for the funding provided through Obamacare.

“If you revert back to these institutional subsidies … then you’re really saying we’re going to pay certain hospitals to take care of poor people and you get much more people concentrated in where they can go, either to the public hospitals or some of the Brooklyn hospitals that are already financially stressed,” said Charles Brecher, director of research for the Citizens Budget Commission. “You’re really underwriting care in those troubled places.”

“What the federal government is doing is basically saying, ‘We’re going to reduce the amount of spending and you get to tell people they don’t have services anymore.’” – Helen Schaub, state policy and legislative director for 1199SEIU United Healthcare Workers East

Healthcare Association of New York State President Bea Grause expressed major concerns about the potential repeal of the ACA and a return to these hospital payments.

“We agreed to reductions in (these hospital payments) under the theory that the Affordable Care Act would be expanding coverage, so there’d be less need for those supplemental payments because they are targeted to hospitals that treat a large percentage of low-income people and senior citizens,” Grause said. “I think the bottom line is ... that there will be less comprehensive coverage for consumers in the future, fewer people will be covered, it will destabilize the health industry and I think take us backward on health care reform.”

Brecher also emphasized the risk of losing federal funding for expanded Medicaid in the state, which would cost the state billions to maintain, a concern echoed by a number of health care experts.

“We have this huge Medicaid program in New York state and to the extent they mess around with Medicaid, there’s a lot of money at stake, but you don’t know exactly how they’re going to do it,” he said. “If they undid the expansion that came with the Affordable Care Act, I think we’re talking a few billion (that the state would be responsible for funding.)”

A decrease in Medicaid funding would have a huge impact on seniors and people with disabilities.

“Medicaid provides for the lion’s share of home care services in New York state and I don’t think people realize that nearly half of the benefits from Medicaid are for seniors and people with disabilities,” said Laura Haight, vice president for public policy at the New York State Association of Health Care Providers Inc. “The loss of Medicaid funding could have real devastating effects.”

The state could face a difficult choice: Should it revert to a plan that would decrease the number of citizens with coverage due to a lack of funding, or try to find billions in the state budget to replace federal funds?

“What the federal government is doing is basically saying, ‘We’re going to reduce the amount of spending and you get to tell people they don’t have services anymore,’” Schaub said. “They’re trying to shift the responsibility onto the states to make the hard choices. They’re just going to take the savings and spend it on tax cuts for the wealthy. We think that’s a tremendously bad deal for the states.”