PT: NY GOP Delegation Opposes Medicaid Block Grants, Favors Per Capita Grant

New York GOP Delegation Huddles to Protect Medicaid Funds as ACA Debate Swirls
By Dan Goldberg Politico March 1, 2017

Over bagels and coffee, courtesy of Rep. Tom Reed, New York’s nine congressional Republicans have been regularly meeting for breakfast so they can hash out what they want and what they need from the legislative effort to replace the Affordable Care Act.

“Medicaid expansion is our top priority,” said Reed, who represents the Southern Tier, and has convened the gatherings. “It impacts all of us.”

The desire to protect federal funds is natural, but places the New York delegation at odds with many others in the Republican party, including Tom Price, the former representative from Georgia, now Secretary of Health and Human Services, who has called for block granting Medicaid.

“All of us agree that block granting would not be good for New York,” said Rep.Claudia Tenney, who represents Central New York.

The concerns of the New York delegation, with its particular emphasis on Medicaid funding, highlight just how difficult it will be for Speaker Paul Ryan to move a plan through the House of Representatives.

POLITICO spoke with six of the nine Republicans in the delegation and they all opposed Obamacare to varying degrees, citing deductibles that are too high, premiums that are too expensive and markets that have too little competition. But all also recognized that New York has benefited from the billions of dollars in subsidies the law provided.

“The concerns of myself and members of the delegation are different from some others in our party,” said Rep. Dan Donovan, who represents Staten Island and parts of Brooklyn.

The weekly meetings, according to Rep. Peter King, who represents Long Island, are a chance for the delegation to see which issues are negotiable, which aren’t, and to reach a consensus so they can speak to leadership with “one voice.”

New York State has one of the nation’s most generous Medicaid programs, and one of the most expensive. Roughly one-third of the state relies on Medicaid, and half of all New York’s children are on the insurance program for low-income citizens.

The delegation prefers a per capita grant, provided that New York is fairly compensated for the cost of covering an individual.

“A per capita basis is more attractive to us as a delegation,” Reed said. “We do want to make sure the base rate is calculated accurately.”

Rep. Chris Collins, who represents Western New York and sits on the Health subcommittee for the House Energy and Commerce Committee, which is working to draft legislation, said he envisions per capita grants being based at 2016 spending levels. The grants would grow with the chained consumer price index plus 1 percent. And the federal government would turn the administration of Medicaid over to the states, an idea that has bipartisan support because plan design could be done at the local level without needing permission from the federal government.

States that did not expand Medicaid would receive additional Disproportionate Share Hospital funding payments to cover their uninsured population.

That would likely appease New York Republicans - and even some Democrats - but the additional money could be hard to justify to Republicans looking for more drastic cuts to federal spending.

It is a paradox plaguing the party.

“We can’t disadvantage anyone and expect to get the votes we need,” Collins said. “So it has been a very delicate negotiation.”

Reconciling the various concerns is "what the sausage making process of legislation is supposed to do,” said Rep. John Faso, who represents the Hudson Valley.

Democrats almost certainly won’t vote for any replacement plan, which means Republicans can only afford to lose a handful of House members if they want to pass legislation. That gives New York, with its nine-member delegation, leverage when discussing its needs.

“Nine gets their attention,” Reed said.

The delegation met with Oregon Rep. Greg Walden, the chair of the powerful Energy and Commerce committee, on February 16, and he appeared receptive to their concerns the New York members agreed.

But early drafts - emphasis on early - show gulfs between what New York members say they need and what Republican leaders are crafting.

A Republican proposal, obtained by POLITICO, called for eliminating the Medicaid expansion in 2020. States that chose to cover people who were insured under the expansion would do so with less federal money.

“I don’t think that’s satisfactory,” King said.

That proposal would cost New York State billions in federal aid and could leave hundreds of thousands uninsured.

“I voted against Obamacare and I’m still opposed to Obamacare,” King said. “But if there is not a very smooth transition, we could have 800,000 people lose coverage.”

Donovan, whose district is similar to King's, is also concerned about any plan that could disrupt the health insurance people have come to rely upon.

“We now have a population [that is] dependent and the President has promised not to pull the rug out from people,” Donovan said.

Faso isn’t opposed to tax credits, which President Donald Trump favors but the House Freedom Caucus opposes, so long as they provide enough help to buy reasonable coverage.

“We have to make sure the value of a tax credit is meaningful and allows people to buy coverage they are looking for,” Faso said. “It doesn’t have to be coverage with all the bells and whistles but it certainly should be good family coverage.”

One problem with that is that benefit design can be mandated at the state level, meaning Albany may require insurers offer lots of benefits even as Congress designs tax credits for plans that don’t require coverage for services such as contraception or maternity care.

Beyond Medicaid and tax credits, members of the New York delegation are concerned over the possible consequences that some Republican ideas would have on their constituents.

King said he is worried that capping the tax exemption on employer health benefits could hurt his district, where many teachers, police officers and other state employees live and rely on the generous health benefits they receive through their unions.

Trump during his Tuesday night address called for expanded use of health savings accounts.

Donovan said he was not opposed to health savings accounts but wondered whether it was realistic to expect lower-income people to put away a couple hundred dollars every month.

“What are the unintended consequences of this,” he wants to know. “Who will this harm?”

Collins said he believed in “personal accountability.”

“We’re all accountable for our own finances,” he said. “We should all be setting money aside for emergencies. Someone at that income level, you would hope they understand about setting some money aside.”

There is also debate over the utility of high deductible health plans. Some in the delegation believe it will encourage more strategic use of medical services.

Others are worried that people won’t be able to afford their deductible or copay and the hospitals will get stuck with the bill and be forced to write it off as bad debt.

Hospitals are often the largest private employers in a district, a point that the Healthcare Association of New York State is making sure these nine Republicans understand.

“It’s been our experience with products like high deductible health plans that they lead to an increase in bad debt for health systems and hospitals,” said Susan Van Meter, HANYS’ senior vice president.

She has also pressed the importance of Medicaid and reminded the members that fewer mandated benefits may lead to lower-cost insurance plans, but also less comprehensive coverage for people, which, in turn, may become an expense for the hospitals when that care is needed.

“We’re bringing together lots of HANYS members to talk, in particular to New York’s Republicans to communicate the risks under repeal and replace plans,” Van Meter said. “We are counting on New York Republicans to protect New York patients, medicaid and hospitals and health systems.”