hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires


News June 2017



Faso, Stefanik vote to slash health-care spending


Eastern New York Reps. John Faso and Elise Stefanik provided a pair of crucial votes last month in support of a Republican plan to repeal and replace former President Obama’s signature health care law.

The two area Republicans supported a controversial repeal-and-replace bill that passed the U.S. House of Representatives by a narrow 217-213 vote on May 4. The proposal now goes to the Senate, where Republican leaders were working behind closed doors in late May to draft their own version of the legislation.

The House bill, officially called the American Health Care Act, would dramatically cut federal support for the Medicaid program while also slashing subsidies for people who buy private insurance plans through state-run marketplaces set up under the 2010 Affordable Care Act, commonly known as Obamacare.

The House bill also would allow states to opt out of some consumer protections established by the 2010 law, including one that requires insurers to provide a minimum set of “essential benefits” and another that bars insurers from charging higher premiums to older people with more health problems.

Faso, whose district includes Rensselaer and Columbia counties and extends southwest to the Pennsylvania border, had been considered likely to support the new bill after having publicly supported an earlier version that House Republican leaders abandoned in March.
Stefanik, whose district covers northern Saratoga, Washington and Warren counties and stretches north and west to the Canadian border and Lake Ontario, never took a public position on the earlier version of the bill. She announced her support for the revised version on the morning of the May 4 vote.

Democrats, who hold all the other seats in the region’s House delegation, voted unanimously against the House bill. Twenty Republicans, including two from New York state, also voted against it.

An analysis released in late May by the nonpartisan Congressional Budget Office estimated the House bill would leave a total of 14 million more people uninsured by next year than if the current health law remained in place – and that 23 million more people would be uninsured by 2026 if the House bill were enacted.

The CBO report estimated that the bill would reduce projected federal spending on Medicaid by $834 billion over 10 years, resulting in a reduction of about 17 percent in the number of people covered by the program compared with the number expected to be covered under current law.
Republicans who supported the bill have argued that some of the rise in the uninsured would be the result of people voluntarily opting out of coverage. The House bill would eliminate an unpopular Obamacare requirement for people to buy health coverage or face a tax penalty. Democrats have argued that the mandate is needed to get younger, healthier people to buy insurance – and pay premiums that help keep insurance costs down for older, sicker people.
In a column in the Times Herald-Record of Middletown defending his vote, Faso, who was elected to his first term in Congress in November, argued that the Republican health plan would lower premiums for many people buying private health insurance. Many analysts say this would be true, particularly for people whose incomes are too high to qualify for subsidized coverage in the Obamacare exchanges. For many of these higher earners, premiums have risen significantly under the Affordable Care Act.

“In too many cases,” Faso wrote, “the Affordable Care Act is forcing people to buy insurance they cannot afford to use.”

For people who buy private insurance, the income-based premium subsidies of Obamacare would be replaced with age-based tax credits, resulting in higher out-of-pocket costs for people with lower incomes.

The CBO analysis concluded that in states that opted out of Obamacare’s essential services requirements and the rate protections for people with health problems, overall insurance premiums would go down. But the agency predicted that in these states, older, sicker people could face sharply higher premiums and “might not be able to purchase coverage at all.”
One of the most popular provisions of Obamacare – and one that President Trump vowed during last year’s campaign to preserve – is its requirement that insurance companies cannot deny coverage to people with pre-existing health conditions.

In her public comments since the May 4 vote, Stefanik has stressed that under the House bill, insurance companies still would be barred from denying or rescinding coverage for people with pre-existing conditions. But the Republican bill would allow insurers to raise premiums for people with pre-existing conditions if their insurance coverage lapsed for more than 60 days. Although companies would still be required to offer coverage to these customers, the prices for those whose coverage had lapsed could become prohibitively expensive.

The Times-Union of Albany quoted Karen Pollitz, a senior fellow at the nonpartisan Kaiser Family Foundation, as estimating that tens of millions of people with pre-existing conditions likely would have a lapse in coverage of 60 days or more and could wind up facing sharply higher premiums. Pollitz explained that many people in the individual market tend to cycle in and out of coverage as they lose or change jobs, become self-employed, move from state to state or face divorce or other changing life situations.

But the biggest impact of the House bill would be on Medicaid, the government health insurance plan for the poor. The Affordable Care Act allowed states to expand Medicaid to cover people earning up to 138 percent of the federal poverty level. For the 31 states that opted to expand Medicaid – including New York, Vermont and Massachusetts – the federal government has paid 90 percent of the cost of expanded coverage. Under the House bill, these federal funds would end in 2020 and be replaced by tax credits, with a much smaller dollar value, to help people buy private insurance plans.

Stefanik has argued that states like New York would be able to keep their expanded Medicaid programs without cutting off anyone now being covered. But the states would have to find another source of revenue to replace federal funds for expanded Medicaid.

The Times-Union quoted Robert Field, a health-care law expert at Drexel University, as saying Stefanik’s position on the Medicaid cuts amounted to the use of “smoke and mirrors to hide what’s going on.”

“I don’t know how any state could afford to keep the expansion if the 90-percent match is no longer there,” Field said.
The funding squeeze in Ne

w York could be much tighter because of a provision added to the House bill at the behest of Faso and Rep. Chris Collins, a Republican from the western part of the state. That provision would free upstate counties from having to contribute to the cost of the state’s Medicaid program. Although this change might be welcomed by upstate property taxpayers, the state would have to come up with $2.3 billion a year just to replace the funds that counties now contribute to Medicaid.

-- Compiled by Fred Daley