Congressional "Repeal and Replace" Health Plan Ill-Suited and Destructive for New York

NEW YORK, NEW YORK June 8, 2017—The American Health Care Act (AHCA), approved by the U.S. House of Representatives and currently under consideration by the U.S. Senate, would undermine the dramatic insurance coverage gains that New York has realized under the Affordable Care Act (ACA), destabilize the individual market and increase premiums and cost-sharing for lower-income individuals, particularly those under 35, according to a new report released today by United Hospital Fund (UHF).

Rewind: New York State Faces Familiar Issues and New Challenges in the “Repeal and Replace” Era reviews the significant progress New York has made since the ACA was enacted in 2010—including cutting its uninsured rate by half, to 5.4 percent—and details how AHCA provisions, uniquely ill-suited for New York's insurance market and regulatory framework, would undermine those coverage gains. Tables in the report compare monthly premiums for individuals in three representative counties under the ACA subsidies, based on income and premium levels, with the AHCA tax credits, based mainly on age.

“The AHCA's flat, age-based tax credit, untethered from the actual cost of coverage, would disadvantage New Yorkers in several ways,” said Peter Newell, director of UHF's Health Insurance Project and author of the report. “In a high-cost state like New York, the AHCA credits would cover a much smaller share of the premium than in lower-cost states. Within New York, subsidy-eligible residents of higher-cost counties like Ulster would pay much more for coverage than those living in lower-cost counties such as Erie. Most important, the AHCA credits coupled with New York's prohibition on age-based rates would make coverage less affordable for younger and lower-income enrollees, undermining the state's efforts to maintain a stable risk pool.”

The AHCA would also eliminate funding for about 25 percent of the cost of New York's ACA-authorized Essential Plan, which covers more than 650,000 lower-income New Yorkers for premiums of $0 to $20 per month, leaving the future of the program in doubt. The report says that, while current enrollees would be eligible for AHCA tax credits, few could afford the increased premiums and cost-sharing under the AHCA's age-based regimen, particularly those in the 18- to 34-year-old range, who make up nearly 40 percent of total enrollment.

Although the AHCA is couched in the rhetoric of preserving state discretion over its insurance markets, the report notes the “creeping preemption” of many provisions that, if adopted, might force New York to revisit long-settled issues. The AHCA's age-based tax credits, for example, could require policymakers to review the current ban on setting rates according to age, while lower subsidies might pressure states like New York to reevaluate comprehensive benefit requirements. Other federal legislation under consideration outside the AHCA could preempt New York provisions governing commercial group insurance, or its benefit standards.

“For decades, New York has worked to improve the cost and quality of health care for all its residents,” said UHF President Jim Tallon. “The ACA mirrored the state's values in many ways, but its successor may not, forcing New York to either reconsider those values or decide how much it can afford—and is willing to pay—to preserve them.”

Rewind: New York State Faces Familiar Issues and New Challenges in the “Repeal and Replace” Era was made possible by support from The New York Community Trust. The full report can be downloaded from UHF's website here.

About United Hospital Fund

United Hospital Fund works to build a more effective health care system for every New Yorker. An independent, nonprofit organization, we analyze public policy to inform decision-makers, find common ground among diverse stakeholders, and develop and support innovative programs that improve the quality, accessibility, affordability, and experience of patient care. For more on our initiatives and programs please visit our website at and follow us on Twitter @UnitedHospFund.

June 8, 2017
Focus Area
Coverage and Access
Health Insurance Project