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Gov. Cuomo Will Ban Insurance Companies From Medicaid if They Pull Out of Exchange

by Precise Leads

June 12, 2017

New York State’s Medicaid program has more than 6 million enrollees.

Amid increasing uncertainty regarding healthcare reform, New York Gov. Andrew Cuomo announced emergency measures last week to halt insurers from fleeing the state’s Affordable Care Act (ACA) exchanges. Under the governor’s regulations, which bypass the state’s Legislature, any health insurance provider that leaves the state’s exchange network would be prohibited from participating in the New York’s Medicaid program and other health-related programs such as Child Health Plus.

Gov. Cuomo’s announcement further requires health insurers operating in the state to provide the 10 essential health benefits now mandated under the ACA, most notably maternity care, lab tests, mental health treatment, prescription drugs, emergency services, and rehabilitative therapy. If the ACA is replaced by the GOP-sponsored American Health Care Act (AHCA), each state would determine which services health insurers must include in their policies. After passing the House of Representatives last month, the AHCA now moves to the Senate for further debate.

The governor’s order also prevents people with pre-existing conditions from losing their coverage. The AHCA, if enacted, would permit states to apply for a waiver from the ACA provision restraining insurers from charging older, sicker individuals higher premiums. States that are granted the waiver have to instead establish high-risk pools, backed by federal funds, to cover those with costlier medical needs.

“These actions will make certain that no matter what happens in Congress, the people of New York will not have to worry about losing access to the quality medical care they need and deserve,” Gov. Cuomo said in a statement.

Impact on the Empire State

About 1 million New Yorkers currently hold ACA health policies from more than a dozen participating insurers, according to the New York Times. Gov. Cuomo’s action is seen by some observers as a way to prevent a number of private health insurers to remain on the state’s exchange network. In other states, major health insurers such as Humana and Aetna have exited all or some exchanges, further clouding the future of the healthcare marketplace.

Given the size of New York’s Medicaid market, Stifel Financial Corp. analyst Thomas Carroll told the Wall Street Journal that the governor’s order could prompt insurers to stay. “The potential for Medicaid contracts now and in the future creates strong leverage,” he said.

But Bill Hammond, a Healthcare Analyst at the Empire Center, questioned the need for emergency regulations. “Even if that law passed tomorrow, it doesn’t take effect until 2018,” he told the WSJ.

Paul Macielak, Chief Executive of the New York Health Plan Association, termed Gov. Cuomo’s order “disturbing” in an interview with ModernHealthcare.com. He noted the emergency regulations may run afoul of existing Medicaid contracts in effect through 2019. The Centers for Medicare and Medicaid Services, the article noted, must approve of any changes to those contracts. Meanwhile, the Greater New York Hospital Association, the Healthcare Association of New York State, the Medical Society of the State of New York, and healthcare union 1199 SEIU voiced their support of the governor’s action, according to ModernHealthcare.com.

More Uncertainty

The healthcare marketplace faces more uncertainty as the reform bill navigates through the Senate, where it will likely be revised from the House version. Health insurers, too, are closely watching the debate as they calculate their rates for exchange-purchased policies for next year. More could decide to leave the ACA individual marketplace — if it remains intact.

As in New York, each governor and legislature may take action on healthcare regulations that might conform or amend what Congress ultimately votes into law. Whatever the final outcome, always make sure your clients have adequate healthcare coverage now and in the future.

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