Trump’s end to subsidy will devastate health plan serving 19,000 here

Oct. 13--WASHINGTON -- New York's Essential Plan -- which offers low- cost health insurance to more than 19,000 people in metro Buffalo and more than 665,000 statewide -- faces a grave future thanks to President Trump's late-night move to stop paying Obamacare insurers their federal subsidies starting next Wednesday.

Trump's move is expected to eliminate a quarter of the Essential Plan's funding, which would force the state to either boost its own subsidies to allow people to continue their current insurance, raise rates or do away with the Essential Plan entirely.

Much depends on decisions yet to be made by Gov. Andrew M. Cuomo and his health care team. Cuomo's spokespeople did not immediately respond to a request for comment Friday morning.

Health care officials in New York State said Trump's move will not affect the vast number of people who get their health insurance through their employers.

But for those on the Essential Plan -- and for Cuomo -- Trump's move could be devastating. The cost-sharing reductions provided the state with about $925 million in federal funds this year.

That means if the governor wants to keep the Essential Plan as is, he and the State Legislature will have to find at least another $925 million a year.

"This is the governor's worst nightmare," said a knowledgeable source in the state's health insurance industry, who asked not to be identified by name.

Bill Hammond, director of health policy for the right-leaning Empire Center think tank in Albany, wasn't optimistic.

"I don't know how long the state can sustain the Essential Plan without its monthly payment from Washington," Hammond said. "This looks to me like a fatal blow."

Trump announced late Thursday that he would stop paying the subsidies that insurers have received for several years in order to offer affordable insurance to people who have to buy plans on their own and not through their employer.

"The government cannot lawfully make the cost-sharing reduction payments," the White House said in a statement. "Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people."

A federal court ruled that Congress must authorize those payments, but both the Obama and Trump administrations had continued to pay them anyway, just because not paying them would undermine the insurance for 7 million Americans.

Now, though, those private insurance plans will start running short on funds when their subsidies disappear Oct. 18.

In most states, that will blow holes through the budgets of private insurers. But New York was one of the few states to create its own "Essential Plan" to serve people who don't qualify for Medicaid and have to buy health plans on their own.

The Essential Plan has proved to be hugely popular in New York. And State Attorney General Eric Schneiderman said he would go to court to try to preserve the federal subsidies that make it possible.

"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 in a statement.

Trump's action undermines bipartisan efforts on both sides of Capitol Hill to try to come up with a way to continue the federal subsidies, which are known as cost-sharing reductions.

Hearing of Trump's actions, Senate Minority Leader Charles E. Schumer of New York and House Minority Leader Nancy Pelosi, a California Democrat, issued a statement.

"Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans' health premiums," the said. "It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America. Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it."

___

(c)2017 The Buffalo News (Buffalo, N.Y.)

Visit The Buffalo News (Buffalo, N.Y.) at www.buffalonews.com

Distributed by Tribune Content Agency, LLC.