New Senate health bill shows no love for New York

July 15--WASHINGTON -- To hear New York health care experts tell it, the Republican senators' new plan to replace Obamacare is the legislative equivalent of a grave pre-existing medical condition, made worse through a haphazard quack treatment.

They say the bill is largely a status quo measure that preserves the quadruple whammy that could cost the state billion dollars more per year than a House-passed measure that leaves the state $7 billion short annually. But they also say the new Senate bill is worse in one way in that it threatens to eat away at a key consumer protection provided under state law.

Higher-income New Yorkers would be losers, too, under the measure, as the bill restores some of the taxes that would have been eliminated under the earlier version of the bill. That tax money would go instead to expanded health care subsidies for lower- and middle-income people who buy health insurance on their own.

One unlikely New Yorker emerges as a winner in the new legislation: Rep. Brian Higgins, a Buffalo Democrat who waged a lonely battle against tax breaks for insurance executives -- and saw Senate Republicans drop those tax breaks in the revised bill.

Overall, though, the new bill is much more similar to the Senate's previous version than it is to the law it aims to replace: the 2010 Affordable Care Act, commonly known as Obamacare.

"So far, I'm not seeing much that changes for New York," said Bill Hammond, health-care analyst at the conservative-leaning Empire Center, an Albany think tank.

Just like its predecessor, the new Senate bill whacks New York's Medicaid program -- which serves everyone from poor children to seniors in nursing homes who spent all their assets on health care -- in four ways. It would:

* Reduce federal Medicaid payments to states over time by changing the way they are tied to inflation.

* Trim payments to states with expensive Medicaid programs by including an "equity adjustment."

* Curb federal funding for states such as New York that expanded Medicaid under Obamacare in a way that will cost New York more than $7 billion more annually starting in 2024.

* Keep in place the House's controversial Collins-Faso amendment that ends New York's practice of charging counties for part of the cost of Medicaid, pushing at least another $2.3 billion in costs annually onto the state.

Not surprisingly, Gov. Andrew M. Cuomo appeared unimpressed with the new Senate legislation.

"The token changes to the Senate health care bill are a thinly veiled attempt to disguise the same cruel bill," he said. "Far from improving our health care system, the Senate Republican health care bill is still a death trap for New York."

Cuomo once again made his case against the Collins-Faso amendment, saying it could lead to cuts that would cripple hospitals, nursing homes and home care providers.

But Rep. Chris Collins, the Clarence Republican who sponsored the amendment with Rep. John Faso, R-Kinderhook, has said Cuomo is more likely to try to raise state taxes instead of finding savings in the state's huge and costly Medicaid program.

"Through the Collins-Faso amendment, we're on the verge of delivering the largest property tax reduction ever," Collins said on Facebook. "Instead of making tough decisions, Governor Cuomo has threatened to push for new taxes on New York families."

Beyond its impact on Medicaid, Hammond said the Senate bill -- like the earlier version and the health bill passed by the House -- threatens to eviscerate the state's Essential Plan, which is aimed at state residents who earn just a bit too much to qualify for Medicaid, the state-federal health program for the poor and lower middle class.

And like its predecessor, the new Senate bill conflicts with existing state law in several ways. It bars people from using federal subsidies to buy insurance plans that cover abortion -- yet New York law requires health plans to cover abortion. And the new Senate bill allows insurers to charge older people more for insurance, while New York law does not.

The new Senate measure also adds one new conflict with state law that could totally alter the market for individuals who have to buy insurance on their own -- or that could amount to nothing.

The bill includes a provision offered by Sen. Ted Cruz, R-Texas, that allows the sale of bare-bones insurance policies with low premiums and gigantic deductibles, all in an effort to make health coverage more affordable for people who probably wouldn't buy insurance otherwise.

"I am encouraged that the revised bill ensures consumers have the freedom to choose among more affordable plans that are tailored to their individual healthcare needs," Cruz said.

New York health experts such as Bea Grause are by no means so encouraged. The president of the Healthcare Association of New York State, Grause said the offering of the Cruz-backed cheap insurance plans would start "a race to the bottom for coverage and consumer protection."

Higgins agreed, saying that those inexpensive plans are "junk health care" that could upend the insurance market. If healthy people flocked to those plans instead of buying more comprehensive insurance, anyone buying more traditional insurance plans would inevitably have to pay more, given that fewer healthy people would be subsidizing the cost of those better plans.

It's unclear, though, whether such bare-bones insurance plans would be available in New York, given that current state law bans them from sale in the state. Federal law typically supersedes state law, though, which is why Grause and others fear that court action could open New York's market to those new health plans.

"I think New York, like a few other states, has a robust regulatory infrastructure," Grause said. "It would be a question of how or whether the Cruz amendment would apply."

Despite Higgins' concerns about the Cruz amendment, the new Senate health bill includes one change that the Buffalo congressman was happy to see. The bill no longer includes a provision that would have given health insurance executives tax breaks valued at as much as $500 million in total.

Higgins was one of the strongest voices in opposition to those tax breaks, railing against it in a committee hearing and on the House floor, calling it a giveaway to corporate executives who don't deserve it.

He said Senate Republicans stripped that provision from the bill knowing that UnitedHealth, one of the nation's largest insurers, is facing a Justice Department lawsuit accusing the company of Medicare fraud -- and knowing that other insurers could end up in the same trouble.

"They're saving themselves from further embarrassment," Higgins said.

Then again, Republican senators were also looking for savings in the bill that allowed them to slightly expand the health insurance tax credits the bill will offer to help the lower middle class to buy insurance.

The new version also preserves taxes on high net worth individuals that were instituted under Obamacare but that were set for repeal under the original Senate health bill. But other Obamacare taxes on medical device companies and health insurers would be repealed, just as they would have been under the Senate bill's first iteration.

Those changes were by no means enough to satisfy Senate Minority Leader Charles E. Schumer, D-N.Y. He urged Republicans to abandon their current health care effort and instead work with Democrats to improve the current health care system.

"Any Republican who votes to proceed on this bill next week will have to look constituents square in the eye and explain why," Schumer said. "Why did they move forward on such severe cuts to Medicaid? Why did they cut taxes for special interests? Why did you send my out of pocket costs skyrocketing?"

Meantime, though, Senate Majority Leader Mitch McConnell argued that Democrats were making the-sky-is-falling arguments that have no connection with reality.

"I'm sure we can expect many of the same tired and predictable attacks from the defenders of Obamacare's failed status quo," McConnell said. "It hardly matters what the draft says, they would launch the same kinds of attacks anyway."

McConnell also noted that Democrats wrongly said Obamacare would lower costs and expand health care options while allowing everyone to keep their longtime policy if they chose to do so.

"They were wrong before," he said. "They're wrong again today."

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