The Supreme Court is again hearing arguments on the constitutionality of the Affordable Care Act (ACA). Some legal scholars believe the most likely outcome is that the individual mandate is removed while the rest of the law stays in place. That would have no meaningful impact on health coverage in New York.  (See our new fact sheet here for more info on the case.) However, overturning the entire law is still a possible outcome. Such a decision would affect New York and the rest of the country drastically. The Court may not reach any decision until next spring. Until then, nothing has changed – it is important to know that New York still has all the same coverage options as before. You can explore those options and enroll in health coverage here: https://nystateofhealth.ny.gov/.

Though it is unlikely, it is a good time to reflect on what would happen in New York if the ACA were overturned. Even with the ACA, New York still has over a million uninsured people – but many of those are uninsured because they are unaware of their eligibility for free or low-cost coverage. Without the ACA, those options would disappear. While many consumer protections would stay in place, millions of New Yorkers would lose their health insurance.  

Consumer Protections

New York State has adopted many of the ACA’s provisions into state law. Whatever else happens, New York State law:

• Prohibits insurers from denying coverage to people with pre-existing conditions or charging them more;
• Requires health plans to cover ten essential health benefits, including prescription drugs and maternity care;
• Requires health plans to keep young adults on their parents’ coverage until age 26;
• Requires plans to meet actuarial value requirements and limits maximum out-of-pocket spending; and
• Prohibits lifetime or annual benefit limits.[1]

Many states rely on the Affordable Care Act for these protections and haven’t adopted them into their own laws.

Medicaid

New York’s pre-ACA Medicaid program covered more people than the Medicaid programs that existed in many other states. For example, New York allowed people with higher incomes to enroll and covered single, childless adults. New York did this through waivers with the federal government, agreements that let us change aspects of our Medicaid program with permission and still receive federal Medicaid funding.

The ACA made many of those features of New York’s Medicaid program available to all states, negating those waivers. Thus, if the ACA is overturned, New York’s Medicaid program would return to the most basic Medicaid program that exists in federal law. The only adults covered through that basic program are parents with income under 83 percent of the federal poverty level and pregnant women who earn under 133 percent of the federal poverty level.  Childless adults would not be eligible for Medicaid no matter how low-income. New York could renegotiate those waivers with the federal government, but in the meantime 2.1 million New Yorkers would lose Medicaid coverage. 

The Essential Plan

Section 1331 of the ACA provided states with the Basic Health Plan option, which offers low- or no-cost coverage to people who earn up to 200 percent of the federal poverty level but aren’t eligible for Medicaid. New York was one of the two states that adopted the Basic Health Plan, which is called the Essential Plan here and now covers around 850,000 New Yorkers. The Essential Plan could not exist at all without the ACA. A small number of people currently enrolled in the Essential Plan might be eligible for some form of Medicaid coverage, but for most the only option would be private individual market plans with no subsidies.

Individual Market

Before the ACA, over 14 percent of state residents were uninsured. When New Yorkers wanted to buy their own insurance, their only options were private plans that cost an average of $9,000 a year.[2] Fewer than 19,000 New Yorkers enrolled in those plans. The ACA allowed New York to create a simpler way to shop for health insurance (the New York State of Health) and introduced premium subsidies for people earning between 200 and 400 percent of the federal poverty level.

Now, over 270,000 New Yorkers have enrolled in private health plans.[3] Premiums for those plans are half what they were pre-ACA, and New Yorkers receive $600 million a year in premium subsidies and cost-sharing assistance that lowers costs even more. Almost 60 percent of people in New York’s individual market (around 160,000) receive that assistance, and it is likely that many would drop coverage without it. This could trigger a death spiral with higher and higher premiums until the individual market returns to its pre-ACA state.

Hospital Sustainability

Health insurance doesn’t just protect the individuals who enroll. More coverage means fewer people end up at our hospitals without any way to pay. If millions of New Yorkers suddenly lost health insurance, New York’s hospitals would end up with many more patients in need of care without a way to pay for it. While a lot of our safety net hospitals are still struggling financially, New York’s enthusiastic adoption of the ACA has meant they are in better shape than those in states that chose not to use all of the ACA’s new options.[4]

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[1] New York State Insurance Law, sections 3216 and 3217.

[2] Noam N. Levey, “A cautionary tale in healthcare reform,” Feb. 21, 2010, The Los Angeles Times, https://www.latimes.com/archives/la-xpm-2010-feb-21-la-na-health-insurance21-2010feb21-story.html.

[3] Sonia Sekhar, “2020 Open Enrollment Recap and What’s Coming,” September 24, 2020, presentation at the OCHIA Partners Meeting.

[4] The Chartis Group, “The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability,” February 2020, https://www.ivantageindex.com/wp-content/uploads/2020/02/CCRH_Vulnerability-Research_FiNAL-02.14.20.pdf