Obamacare cuts will deal a blow to insurers

President Donald Trump’s directive rolling back Affordable Care Act subsidies, which followed on the heels of his executive order that may open the door to businesses purchasing health insurance across state lines, would destabilize the state’s insurance exchange and drive gaps in the state budget, officials said.

Nixing the funding threatens a popular insurance program aimed at lower-income New Yorkers. The Essential Plan offers free or low-cost coverage to people earning up to 200% of the federal poverty level, or $49,200 for a family of four. Trump’s funding cut would also affect subsidies paid to insurers to cover the cost of insurance copays and deductibles for individuals earning between 200% and 250% of the poverty level.

The president signaled that he would no longer pay insurers for subsidizing low-cost plans. That would eliminate federal funding for the Essential Plan. About 683,000 New Yorkers are enrolled in that program.

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“We are concerned about the potential adverse impact on the vulnerable populations enrolled in these extremely critical plans as well as on the state budget, which could be stressed with the loss of support for this model program,” said Healthfirst, an insurer that covers one-fifth of those enrolled in the Essential Plan.

New York state receives about $870 million to finance the Essential Plan and must decide whether it will fund the program on its own.

The Essential Plan also covers lawfully present immigrants who are ineligible for Medicaid. The state will now have to shift these people back to Medicaid, but unlike the Essential Plan, for which the federal government picked up 90% of costs, the state must fund the full fare for these individuals in compliance with a state court ruling. The shift of that population to the Essential Plan had resulted in nearly $1 billion in state savings.

State Attorney General Eric Schneiderman and 17 other attorneys general are likely to sue to stop the Trump administration from dropping the funding.

“I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost,” Schneiderman said.

Source : http://www.crainsnewyork.com/article/20171016/health_care/171019925/trumps-obamacare-cuts-to-cost-insurers

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