New York: Less than meets the eye in Gov. Cuomo's ACA protection budget deal?

A big news story out of New York State today is about Governor Andrew Cuomo reaching a budget deal with the state legislature:

Governor Andrew M. Cuomo, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie today announced an agreement on the FY 2020 Budget. The Budget holds spending growth at 2%for the ninth consecutive year and cuts taxes for the middle class.

The Budget includes several landmark policies that will bring sweeping transformation and social justice reform to the state with the passage of the permanent 2% property tax cap that has already saved New Yorkers $25 billion since it was first implemented in 2012; a strategic MTA reform plan and steady revenue stream to fund the next capital plan through Central Business District Tolling; an additional $1 billion to support education, bringing total education funding to $27.9 billion; and landmark criminal justice reforms, including reforming the cash bail system, speedy trial, and the discovery process for a more fair and just New York for all.

I live in Michigan, not New York, but there was one bit which caught my attention in particular:

Codifies the Affordable Care Act and Health Exchange into Law: As Washington continues to threaten to roll back the historic progress made with the Affordable Care Act, the codification of key ACA provisions and the New York State Health Exchange into law to ensure that no matter what happens at the federal level, these key provisions are protected in New York State.

Huh. On the one hand, that sounds fantastic! However...

...New York already had some of the key provisions of the ACA codified into law long before the ACA itself came around.

The question is which provisions have been codified, specifically, and how is that different from current state law?

I know that under current New York law, at least five major provisions of the ACA are already baked in:

• Guaranteed Issue: Since 1992, insurance carriers aren't allowed to avoid selling healthcare policies to people based on their medical condition or history.

• Community Rating: Since 1992, insurance carriers have to charge the same price for a given healthcare policy to everyone...in fact, this goes farther than the ACA, which still allows for a 3:1 age band ratio for premiums based on how old you are.

• Essential Health Benefits: Since 2013, New York law has mandated that state major medical healthcare policies must cover the same Essential Health Benefits as defined under the Affordable Care Act.

• Young Adults on Parents Plans: Since 2009, New York law has mandated that young adults can stay on their parents healthcare policies until they turn 29 (three years longer than under the ACA). The catch is that they can't be married, along with a few other oddball requirements, so I suppose that's a wash in terms of the total number of people eligible.

• Prohibition on Annual or Lifetime Coverage Limits: Since 2011, New York has prohibited lifetime and annual coverage limits "of essential health benefits in an individual, group or blanket policy of hospital, medical, surgical or prescription drug expense insurance".

Collectively, these represent four of the six "Blue Leg Protections" of the 3-legged stool (I was never quite sure where the "under 26" provision fit into the metaphor).

Until I'm able to learn more about exactly what this new budget deal actually changes, it sounds to me like the most significant one is decoupling the NY State of Health exchange platform from the ACA itself. Don't get me wrong, that would be an important thing...but I'm not sure how big a deal that would be in the larger scheme of things. I suppose it could be argued that this would mean it would still be easy to comparison shop policies on a level playing field, and it would also allow the state to keep restricting enrollment to a limited Open Enrollment Period window to help reduce adverse selection issues.

Unfortunately, this also illustrates the downside of locking in "Blue Leg" protections at the state level: Without the red and green leg financial assistance alongside them, disaster looms in the event the ACA itself is repealed.

The entire reason New York's individual insurance market collapsed in the early 2000's was because the state imposed Guaranteed Issue and Community Rating laws--which naturally caused premiums to increase dramatically--but without an individual mandate, limited enrollment period or, most of all, financial assistance to help cover those increased premiums.

Retaining NYSoH will partially replicate the red leg, but the green leg is critical to prevent a similar "death spiral" from happening in the future.

From a 2013 Reed Ableson article in the NY Times (just before the ACA exchange plans kicked in--including tax credits, open enrollment and the individual mandate):

Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under the federal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.

State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.

Again, that $308/mo was without subsidies included. Even in 2019, average individual market premiums in New York are $579/month...barely over half the 2013 average.

...The new premium rates do not affect a majority of New Yorkers, who receive insurance through their employers, only those who must purchase it on their own. Because the cost of individual coverage has soared, only 17,000 New Yorkers currently buy insurance on their own. About 2.6 million are uninsured in New York State.

The NY individual market has soared from 17,000 in 2013 to over 270,000 today (and that doesn't inlcude the off-exchange market). Most of the red leg was already cut off starting this year (i.e., the mandate repeal). If you keep the Blue Leg Protections but remove the Green Leg entirely, that 270K would likely plummet back down to 17,000 or so again within a very short timeframe.

In fact, it's worse than that: New York also has around 790,000 residents enrolled in their Basic Health Plan program (called the Essential Plan). If the entire ACA is repealed, all 790,000 of them would be kicked off their healthcare coverage as well.

A couple hundred thousand would likely be shunted back over to Medicaid instead (the BHP program allowed the state to "shift" 235,000 legal immigrants from Medicaid over to BHP to save money), but you're still talking about upwards of 800,000 low- to moderate-income New Yorkers who would find themselves unable to afford anything beyond junk plans again.

Locking in Blue Leg protections is good...but it absolutely has to be coupled with the Green Leg and ideally should include the Red Leg as well.

Don't get me wrong--I do applaud Cuomo and the state legislature for locking in the protections regardless, and even if some are just minor tweaks it's still a good thing. I just hope they realize that the other shoe could easily drop as well.

In the meantime, Gov. Cuomo's claims about "codifying the Affordable Care Act and Health Exchange into Law" are half true; Most of the provisions appear to have already been done as far back as 27 years ago--although it's also worth noting that several did happen under his watch...just a few years back. In some ways this is similar to what he did last summer when it came to the final 2019 ACA market rate hikes.

UPDATE: OK, someone sent me the actual legalese in question, and while most of it is pretty headache-inducing, I think I've figured out the ACA-specific protections:

• Subpart A (Pages 90 - 98) seem to re-codify Guaranteed Issue and Community Rating provisions.
• Subpart B (Pages 98 - 131) re-codify and specify the Essential Health Benefits which must be covered.
• Pages 105 - 106 also lock in the ACA's actuarial value metal level definitions (Bronze/Silver/Gold/Platinum) at 60 - 90% AV. This seems to be new.
• Subpart C (Pages 131 - 134) codifies coverage of "medically necessary" abortions...which I'm puzzled by since I thought New York, California and Oregon all required coverage of abortion regardless of whether it's "medically necessary" or not. I might be misunderstanding the significance of this section, however.
• Subpart D (Pages 134 - 142) has to do with prescription drug coverage. I assume this is mainly more details regarding the Essential Health Benefits section.
• Subpart E (Pages 142 - 145) prohibits discrimination based on gender or marital status. I understand the gender part, especially given the recent increased awareness and sensitivity to the GLBTQ community, but I'm not sure I get the "marital status" part. Perhaps that's a New York-specific issue?
• Subpart F (Pages 145 - 155) has something to do with "group life, health, accident and blanket accident/health" policies." I think this section has to do with regulating association health plans, but I could be wrong.

If I'm reading the above correctly, the only major ACA provision locked in by this section has to do with the minimum actuarial value ratings, while the others seem to be more clarifications of existing regulations or others not listed in my "blue leg" visual.

Later on in the document, starting on Page 202, NY's state insurance marketplace, NY State of Health, is also codified into state law:

Section 1. This act shall be known and may be cited as the "NY State of Health, The Official Health Plan Marketplace Act".

§ 2. Article 2 of the public health law is amended by adding a new title VII to read as follows:

TITLE VII:

NY STATE OF HEALTH

Section 268. Statement of policy and purposes.

...and so forth.

Interestingly, there's a bunch of mentions of "eligibility for premium tax credits or reduced cost-sharing under applicable federal or state law", which means NY State of Health would be officially allowed to continue to calculate both APTC and CSR financial assistance...except, as noted above, there's nothing here which would actually provide funding for APTC or CSR subsidies in the event the ACA itself were to be repealed.

Hopefully it'll never come to that in the first place...