NEW YORK—Much like the rest of the country, New Yorkers digested the United States Supreme Court ruling regarding the Affordable Care Act (ACA) Thursday morning, with many wondering how the complicated new system would affect the Empire State.
In a 5–4 decision, the Supreme Court upheld all provisions of the ACA including the mandate, which will federally require everyone to have health insurance. Those who do not comply with the mandate by 2014 will be subject to a tax that will increase. In 2014, uninsured individuals will have to pay $95, rising to $695 by 2016. Households will have to pay 1 percent of their income rising to 2.5 percent by 2016.
The ACA also requires insurance companies to cover pre-existing conditions and give no lifetime limit to coverage.
The Medicaid expansion provision was upheld, but the Supreme Court ruled that the federal government is not allowed to terminate the funds to a state if they do not expand.
New York already had some measures in place as a backup if the ACA did not go through, so there were no significant changes in New York.
Gov. Cuomo commended the Obama administration, “Thanks to the leadership of President Obama and his administration, particularly Secretary Sebelius, the Affordable Care Act will provide access to health care to millions of Americans nationwide and more than 1 million New Yorkers, and I am pleased the Supreme Court upheld this law.”
According to statistics from the Community Service Society, an independent advocacy group for low-income New Yorkers, 1.1 million of the 2.8 million uninsured New Yorkers will be required to purchase insurance under the mandate through the Health Exchange. Much of the rest will likely fall under new Medicaid guidelines.
Cuomo set up the Health Exchange in April, which acts as a way for people purchasing health insurance to get bulk discounts.
“The whole principle of the exchange stands under notions that if everyone has to buy in, then younger, healthier purchasers will help offset the cost of less healthy, older, and riskier purchasers,” said Russell Sykes, senior fellow at the Empire Center, a project of the Manhattan Institute.
Compared to buying individual or family coverage plans on the free market today, the cost is expected to drop 66 percent, according to Community Service Society.
Medicaid
The Supreme Court found Congress in the right in Medicaid expansion to states that wanted it, but ruled against terminating state’s Medicaid funding if they chose not to expand. The “expansion” is taking people into the Medicaid system at a certain percentage of the poverty line, which varies state to state.
New York is ahead of much of the nation in this regard covering people with children up to 100 percent of the poverty line with plans to increase with or without the ACA.
The expansion will help people who do not have children and are between 100 percent and 133 percent of the poverty line.
“There is a small group that is going to have an expansion. The court ruling does not really affect that because New York was already planning to do that anyway,” said Arianne Slagle, director of Health Policy for Community Service Society.
The savings in Medicaid was a big reason state Comptroller Thomas P. DiNapoli was a supporter.
“The law has significant fiscal implications for our state, providing more than $1 billion annually in new Medicaid assistance and delivering affordable health coverage for New Yorkers,” DiNapoli said in a statement.
Potential Trouble
But, there could be storm on the horizon if New York doesn’t get a $10 billion reinvestment from the federal government.
“The Supreme Court decision helps Cuomo move forward with his Health Exchange but the bigger risk still lies in whether the feds are going to approve a huge Medicaid waiver for New York,” Sykes said.
The federal government currently pays for half of the state’s Medicaid costs. Cuomo has put measures into place that are resulting in substantial savings to the state, meaning the federal government as well—and he wants to see that money come back to New York.
The state submitted a waiver, the largest ever, claiming a savings of $34 billion over five years. “They want the feds to give back over two-thirds of the savings that they predict will occur because of the reforms they are announcing,” Skyes said.
The ruling on the waiver will come down later this summer.
Slagle hopes the Medicaid waiver goes through, but is not quite ready to look past today. “This is a really big win for New York. We were already planning on moving forward and this is basically securing our state funding to expand health insurance to more people.”
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