Repeal of Obamacare could bust NY's budget

ALBANY -- President-elect Donald Trump's pledge to repeal and replace the Affordable Care Act could have steep fiscal implications for New York, which has 3.3 million people enrolled in its health exchange.

Since New York's health exchange launched under so-called Obamacare in 2013, Medicaid recipients rapidly increased as millions of low-income New Yorkers signed up for health care.

The federal government subsidized much of the cost, and last year New York launched a new program, the Essential Plan -- an off-shoot of Medicaid that in part provides coverage to immigrants otherwise ineligible -- that has seen its enrollment soar.

The state Budget Division estimated that the federal subsidies for the Essential Plan alone this year would exceed $1 billion, which could be wiped out under Trump's proposals.

"The biggest possible impact would be the Essential Plan and the federal dollars that go to that," said Leslie Moran, spokeswoman for the state Health Plan Association, which represents insurers.

New York’s exchange has 2.3 million enrollees on Medicaid, 565,000 on the Essential Plan and 227,000 on Child Health Plus – a plan for low-income children.

The government-subsidized programs have all but swallowed up the state's private marketplace.

Just 225,000, or 7 percent, of people on the health exchange are enrolled in private plans -- which was an aim of the federal law: to get people paying into the system to lower health-insurance costs for everyone.

In all, New York gets about $2.7 billion in federal aid a year for its exchange, second only to California, the Empire Center, an Albany-based conservative think tank, estimated.

How much of that would be at risk under changes sought by Trump next year is uncertain, but any major funding shift could hit the state's $147 billion budget, officials estimated.

Another potential impact might be Trump's proposal to turn to block grants for Medicaid rather than matching funds based on enrollment.

New York's Medicaid program is the most expensive in the nation at $62 billion, with more than 6 million enrollees, including those on the exchange.

The traditional funding formula for Medicaid is that the federal government picks up 50 percent, while the state and local governments in New York pay the rest -- though counties had their portion frozen by Gov. Andrew Cuomo in recent years.

New York state government pays about $18 billion a year for Medicaid.

If New York's federal aid for its exchange was slashed, the state would likely end up with a more traditional funding share from the federal government, state officials estimated -- meaning the state would need to pick up a larger tab.

For example, New York gets 95 percent reimbursement from the federal government for the Essential Plan, which limits premiums for enrollees to $20 or less a month.

"So New York has been drawing down almost $1 billion a year net gain from Washington by adopting the Essential Plan," said Assembly Health Committee chairman Richard Gottfried, D-Manhattan.

"If the Affordable Care Act is repealed, it pulls that money out from New York, and those folks then go back on New York-funded Medicaid. And that would be a very big hit on the state budget."

State officials said it was too soon to know how any changes would affect the state budget for the fiscal year that starts April 1.

School aid and Medicaid make up the two largest pieces of the state budget.

New York officials said the health exchange, which is currently open for 2017 enrollment, has been a success: The number of uninsured New Yorkers has declined by nearly 850,000, bringing the rate of the uninsured down from 10 percent to 5 percent.

The exchange, called NY State of Health, "will review details of the incoming administration’s policies regarding health insurance," the state Health Department said in a statement.

"In the interim, we will continue to focus on ensuring that all New Yorkers have the best possible healthcare and insurance options."


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