Federal health policy is undergoing its most significant changes since the Affordable Care Act was signed into law more than 15 years ago. The health policy team at the Rockefeller Institute is tracking these changes closely and has written extensively on how provisions in the One Big Beautiful Bill Act and related rule-based changes may impact New York State. On this episode of Policy Outsider, we invite the authors of these recent analyses to discuss the shifting health policy landscape and share what they are keeping an eye on as the impact of these changes comes into focus.
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Joel Tirado 00:00
Welcome to Policy Outsider presented by the Rockefeller Institute of Government. I’m Joel Tirado. Federal health policy is undergoing its most significant changes since the Affordable Care Act was signed into law more than 15 years ago. The health policy team at the Rockefeller Institute is tracking these changes closely and has written extensively on how provisions in the One Big Beautiful Bill Act and related rule-based changes may impact New York State. On today’s show, we invite the authors of these recent analyses to discuss the shifting health policy landscape and share what they are keeping an eye on as the impact of these changes comes into focus. That conversation is up next.
Courtney Burke 01:00
Hello, I’m Courtney Burke, Senior Fellow in healthcare policy at the Rockefeller Institute and a principal at sacs policy group, and I’m here today to talk about some major changes in healthcare with Jillian Kirby Bronner, who is a special advisor to the New York State Budget Director with over two decades of experience in healthcare finance.
Jillian Kirby Bronner 01:18
Hello, Jillian, hi. Thank you for having us. I’m looking forward to this important comment. Important conversation.
Courtney Burke 01:24
Yes, great thanks for joining. And we also have Troy Ochsner, who is a fellow at the Rockefeller Institute and former deputy superintendent for health insurance. Good to be talking with you, Troy.
Troy Oechsner 01:37
Thank you so much. Courtney, great to be here. Thanks.
Courtney Burke 01:40
Great. Well, we’ve recently co authored some pieces for the Rockefeller Institute to help explain some of the major changes that are taking place in healthcare. And some of those changes are from legislation, some are from regulatory changes, and some are currently being litigated. So we’ll talk more about all of these different changes, who it impacts, what to be aware of and the timing of the changes. Why don’t we start with the legislative changes from what’s called the House Resolution Number one, otherwise known as one big, beautiful Bill act. Some people call it Oba. Today, we’ll call it the big bill when discussing HR one. And to get into HR one Jillian, why don’t we start with a question for you? I think what is probably most important for the listening audience to understand is that many people’s health insurance may be impacted by this bill. So what advice would you give to the public about these changes?
Jillian Kirby Bronner 02:40
You’re right. Courtney, health insurance is being impacted in a way that hasn’t happened in over a decade. Arguably, this period may be one of the most substantial health care reforms we’ve ever seen. Because of that, many people will need to pay more attention to their health insurance than they may have in the past. And the best advice I can give is to make sure that your contact information is up to date. If you receive a letter, an email or some sort of communication, that additional information is needed in order to verify your eligibility or your continuation with your current health insurance option, make sure you respond. It’s very important that New Yorkers maintain their coverage, and the way to do that is to make sure that you’ve submitted the necessary documentation to be enrolled in a program for which you are eligible.
Courtney Burke 03:27
That’s great. Thank you. Jillian, very important information, and one of the populations that’s going to be impacted by this legislation are immigrants and Troy. I was wondering if you could talk a little bit more about the populations that are impacted, because there are people who are immigrants, who are residing under the color of law, who have health insurance, who may or may not be impacted. Can you talk about the impact on immigrants in a little bit more detail?
Troy Oechsner 03:59
Yeah, absolutely. So. I mean, I think everybody in New York is going to be impacted by this, but one of the set of folks that are going to be most directly impacted are these persons residing under color of law or protocol, as they’re called. And at the heart of this is a 2001 decision from New York’s highest court called Elisa versus Novello. And in that case, the New York’s highest court reviewed this welfare reform law that the state had passed, and it denied state funded Medicaid to certain legal immigrants. The court found that that that state law violated the state’s constitution, that the under the Constitution, the state had a duty to aid the needy, and it also discriminated against these legal aliens, again referred to as Pru call, persons residing under color of. Law, and those are basically people who the federal government knows are here. It’s not planning to deport them. And one of those categories would be the DACA folks, the Deferred Action for Childhood Arrivals population, which people who have arrived in this country and as children and are, you know, currently under, you know, legal protection in the United States in terms of their immigration status, at least right now. So, you know, the Affordable Care Act made these protocol folks eligible for federally funded tax credits to qualify them for buying coverage through the exchanges in New York, it’s called the New York State of Health, or as a pass through to the state administered basic health plan, known as the essential plan, which you just referred to, and unfortunately, the big bill eliminates aptcs or the advanced premium tax credits, and those are the credits that everybody gets under the Affordable Care Act, if you meet the certain income qualifications that help you buy insurance make it more affordable, and there’s around half a million of these crew call folks in New York, and many of them enrolled in the essential plan who they’re no longer going to qualify for these federal tax credits. And by eliminating these tax credits, it could cost the state something like $3 billion in state funds to provide this equivalent healthcare starting in this coming January. So it’s a big deal, and it’s going to be one of the big issues in the upcoming budget.
Jillian Kirby Bronner 06:51
If I could just add, and I totally agree with Troy’s summary of the situation. We did know in prior writings in the Rockefeller Institute that it’s possible the circumstances surrounding the aliasa case have changed such that there are decisions the state will need to make on how to proceed. As Troy notes it, you know, the state has estimated that the cost of covering this population is $3 billion and so the most immediate and substantial fiscal decision the state will face surrounding the aliasa population is what is covered and for whom Troy gave an example of the DACA population. This also includes green card holders, for example. And recently, the state moved their basic health program to what’s known as a 1332 waiver, and in doing so, suspended about $10 billion in a Basic Health Plan Trust Fund, raising questions about whether the trust fund balance could be used as a potential tool to help mitigate the impact of the actions required under the federal legislation. So not only does the state need to think about how to cover New Yorkers, but it also needs to think about making sure there are providers there to serve them. It’s a complex decision making process. You can’t only look at one issue in a vacuum, and this is certainly one of the most complex decisions the state will be facing as trinoda,
Courtney Burke 08:19
yeah, and that’s a great point, because we started by really honing in on who is being impacted and the populations, but then we began to talk about the larger fiscal impact of some of these changes, and we’ve been focused so far primarily on coverage and the essential plan, as you mentioned. But Jillian, you’ve got a lot of great experience in finance. There are other parts of the legislation that are going to have fiscal impacts on the state. And I was hoping you could talk a little bit more about some other pieces, like the managed care tax and some other parts that are going to have a fiscal impact.
Jillian Kirby Bronner 08:55
That’s right, Courtney, there are really big changes potentially for New York. We’ve noted, you know, the basic health plan financing issues regarding funding for non citizens, legally residing non citizens, that was prohibited by the federal legislation. In addition, New York was recently approved to implement a managed care tax, which funds rate increases for health care transformation activities and providers, and New York leverages a federal share on support for distressed hospitals through the state directed payment program. So in addition to the subsidies that are received through the exchange and the essential plan, prospectively, there’s a risk that the state’s ability to leverage federal financing mechanisms which bring dollars to the state’s $300 billion healthcare economy, are at risk. We are, you know, waiting to see where the federal regulations that are currently in draft form are landing on this. But they at at present are not necessarily drafted favor. Believe for New York
Courtney Burke 10:02
Yeah, well, we’ll continue to keep an eye on that with a with our different papers on these topics. But Troy, I’m going to go back to you for a minute, because we’ve been talking about specific impacts on New York State and specific impacts on populations, but the overall marketplace for insurance, I presume, is going to be impacted by these changes as well. And if you could just talk about some of those larger marketplace impacts on insurance for a minute, that would be great.
Troy Oechsner 10:33
Yeah, absolutely. So, you know, I think we’re expecting both from the big bill and from the set of rules that are coming out, which we’ll talk about in a second, but it’s going to make health insurance coverage more cost, more for for for people getting the coverage through marketplaces and and fewer benefits, and It’s going to make it harder to sign up. And I think one of the without going into all the specifics on those many changes, the real impact is that by putting these barriers in place, what it’s going to end up doing is something that in the industry we call adverse selection. It’s going to be one of the big impacts. And adverse selection is just a fancy industry word for making the health insurance pool of people who are covered older and sicker, typically. And so think about it this way, when it’s more difficult for people to sign up for insurance, when there’s more barriers in the way, who tends to not enroll as much? It’s people who are healthier younger, and that leaves the remaining people who are covered by insurance to be older and sicker, and they’re typically more expensive, which helps drive premium increases. And what you really want to be aware of is what economists and insurance people call an adverse selection death pool. I love that term because it sounds so dramatic, but it really is, because as premiums increase, the younger, healthier folks continue to shed, and it’s this vicious cycle and that just gets worse and worse, and we’ve made a lot of progress so far, so there’s a real concern that it’s going to get worse and
Courtney Burke 12:36
worse. Yeah, well, we will certainly keep an eye on on that spiral, and hope that it doesn’t end the way that you suggested Troy, before we go into the rules and the regulations that you alluded to, I had one more question for for Jillian, because we started out by talking about the populations that were impacted and what the public should be aware of. So Jillian, do you have any parting words before we get into the regulations about what people can do to minimize the impact on insurance coverage, or what the state could do to minimize that impact?
Jillian Kirby Bronner 13:13
Sure. Courtney, that’s a great question. I’ll say New York is one of about 20 states that operates a state based health insurance exchange in New York it’s called New York State of Health. You can find it at New York stateofhealth.com and their online tool allows you to electronically apply for the state’s public health insurance options, along with federally subsidized coverage and non subsidized coverage through the individual and small group marketplaces, because New York operates its own state based exchange, New York has the option to opt out of certain policies that have been prescribed by the federal government for federal exchanges. Moreover, the state recently developed an application for phones, mobile phones that you can download, which allows you to upload documentation in real time and navigate some of the changes that have been imposed by the federal government, which are coming over the next several years. This tool, along with the state based exchange positions NEW YORK Well, to ensure that New Yorkers have access to coverage and have ways to communicate both with the state and their insurers to submit the necessary documentation to maintain their coverage.
Courtney Burke 14:35
That’s great, very helpful information. I think I will go to the New York State of Health and download that app as soon as we’re done recording today, but great. I want to continue the conversation and change a little bit away from HR one and look at some of the recent federal rules that have been proposed to be implemented that are going to impact healthcare coverage. One of the things that I think is important and. You alluded to, this is the expiration of some enhanced premium tax credits. If you could tell us a little bit more about those tax credits and their potential expiration and anything else that is in some of the recent rules that you think is important for people to know about about coverage and how it could be impacted
Troy Oechsner 15:22
absolutely so the enhanced premium tax credits. Remember, the whole deal with the ACA, the Affordable Care Act is, you go out and buy coverage, we try and get everybody in the pool, and we’ll help you buy that coverage by providing advanced premium tax credits, or these tax credits that help reduce the costs of premiums for you. And one of the biggest issues that was not addressed by the one big bill or even by the regulations, is these extended or enhanced premium tax credits, and it’s going to be one of the biggest issues for affordability for private commercial health insurance. And these enhanced premium tax credits began under the in the pandemic with the American rescue plan, which was passed under Biden in response to the pandemic. And then these credit enhanced credits were prolonged under the inflation Reduction Act. So that was like 21 and 22 and what they did was, among other things, it stopped this cliff of affordability, because the original way that the ACA work was that between where Medicaid picks up, which is 100% or in New York, 138% of the federal poverty limit, up to 400% of The Federal Poverty Level you if you fell within that range, you could you were entitled to these premium tax credits. But if you were just above 400% then you got nothing that. Hence the cliff. And so what these enhanced premium tax credits did was make it easier for people who were kind of of moderate middle income to get these premium tax credits if health care was really expensive and was above a certain percentage of your income, even if you made more than that 400% of the federal poverty limit, and That’s about 128,000 for a family of four in 2025 that’s that’s that 400% so anyway, these credits are set to expire at the end of 2025 and there was nothing in either the big bill or in the regulations, really couldn’t have been done by the regulations, but there’s nothing currently that is extending those, although, as Jillian and I have discussed, all three of us have discussed, you know, there is a possibility that Congress may consider extending those in some form, but that’s going to have a real big impact. There’s going to be this Congressional Budget Office, which is sort of a neutral referee on what legislation impacts will be, is estimating around 4.2 million Americans who are going to lose their coverage, and even for those who keep the coverage, premium costs are projected to increase substantially again, because when premiums go up, the people who are healthier tend to leave and you’re left with sicker folks. And remember our word adverse selection, that can happen. So that’s going to be another big federal debate going on.
Courtney Burke 18:57
Yes, okay, well, speaking of federal debates, some of this is obviously being litigated, and we’re going to turn to that in just one second. Troy says, since you’re a lawyer by training, thought you’d be the best person to ask about the litigation, but Julian, you gave such a great overview of the overall impacts of some of these regulations and rules. Anything else you want to note before we move on to the litigation,
Jillian Kirby Bronner 19:24
sure, Courtney, that’s, that’s right, it’s not just the big bill that is impacting New York. In fact, it’s, it’s really the combination of the bill and other regulatory actions that the Trump administration is taking. And in fact, even as we were, you know, thinking about this call, there were certain things that maybe dropped from the bill, but are being implemented anyways, through regulation. The executive has immense control over healthcare financing through its rulemaking abilities, and we’ve already seen multiple regulations put. Forward by the Trump administration that have significant impacts to New York. You know, as we’ve talked about, these include not only the Affordable Care Act, marketplace rules, but also rules that have dramatic impacts to the way that we finance our Medicaid program, including, but not limited to state directed payment templates, the Medicaid waiver and provider taxation, New York will need to renegotiate its entire Medicaid managed care program, which for over a decade we’ve operated through a care management for all principle, where the majority of New York Medicaid enrollees are covered through Medicaid managed care or managed long term care. That program, along with all of the other innovative models of care that are authorized through the waiver, expire on March 31 2027, so all three of these programs, the waiver provider taxes and state directed payment templates are used by New York to support its health care goals. And the federal government has been clear with us through its rule making activities and or the bill that they’re seeking changes going forward. So to answer your question on both timing and impacts, we could see these changes start to materialize as early as next fiscal year, especially for non citizens, distressed providers, and certainly the state and the stakeholders are going to do their best to mitigate it, but the federal government is Seeking rather dramatic changes.
Courtney Burke 21:40
Yeah, absolutely. And I think we’ll have one more question. I wanted to ask Troy about some of the litigation that’s currently in the courts related to some of this, and then Jillian will wrap up with you to just talk a little bit more about that timeline and foreshadowing some of the things that could happen that could impact this one way or the other. So, so Troy, if you could just say a few things about some of the current litigation that is related to health care coverage,
Troy Oechsner 22:08
absolutely. So, you know, of course, what would we be as Americans if we weren’t challenging new rules in court? And one big case that we’ve been watching is this lawsuit that was brought by 21 states, including New York, and it challenges the legality of this new regulation that Jillian, you know, and you Courtney have referred to the Trump administration has put out Regarding rules for the ACA Marketplace coverage and as Jillian alluded, to, rule makes a number of really important big changes, many of which were part, as Jillian noted, part of the original Big Bill statute before Congress, but were struck by the Senate parliamentarian because they didn’t comply with the rules that Congress has for passing certain laws by a simple majority to avoid a filibuster. And some of those changes include like a technical set of changes that undo restrictions on insurers that will end up resulting in coverage that costs more and covers less benefits they include like increasing the maximum that consumers would pay out of pocket for things like CO payments and deductibles, as well as allowing insurers to offer less generous benefits in coverage overall, so consumers could expect to pay more and get less and other changes are make putting roadblocks that we’ve referred to for people to enroll or re enroll, things like shortening the open enrollment period for when people can sign up for coverage, and requiring all this new paperwork to for proof of things, tax returns and immigration status instead of, oh, it’s currently being done much easier by allowing the the government to verify these things electronic connections with like, say, the IRS or home charity. So all these things you know, resulting in in problems. So the rule being challenged, and again, a lawsuit by 21 states, they’re requesting an injunction, or basically an order that the Trump administration not enforce this new rule, arguing that the rule doesn’t comply with a federal law called the Administrative Procedure Act that requires federal agencies to, among other things, have a rational basis for their rules. And one of the things that we were on the watch for is how the federal district court and in this case, it may be impacted by a Supreme Court case called Trump V casa, which, among other things, limited the ability of federal district courts to issue these nation. Wide injunction. Interestingly, there was just a recent case in Maryland that the Maryland District Court that said that the Supreme Court, they issued an injunction for some of the the new rules that the Trump administration is bringing, not all of them, but many of them, and it’s a nationwide injunction, and the court in Maryland distinguished this Trump fee Casa case, remember the Supreme Court case limiting district court’s ability to make decisions saying that it didn’t apply here, in part because the federal statute being used to challenge the rule. The Administrative Procedure acts gave the court the authority to make these rulings regarding federal agencies. So all that is to say there’s a lot going on in court, and, you know, court challenges to these rules, and we’ll see how that plays out.
Courtney Burke 25:56
Yes, so stay tuned. I know we’ll be monitoring what’s what’s happening and the impacts, and so just to wrap it up for today, because we will have the opportunity in the future to go into more detail and talk more about the different things in the in the bill, in the rules, what’s happening with the litigation for today, though, Jillian, if you could just say a few words about what you anticipate could happen in the next few months? Just to give us an idea of what we should be keeping our eye on,
Jillian Kirby Bronner 26:28
I think I’ll answer this in sort of a two part way. I think best case scenario we see a situation like we saw with the dish cuts, which were enacted as part of the Affordable Care Act, as part of one of the pay fors, and have not yet been implemented, but are scheduled to go into effect in October of this year. And I think we’re all hoping those are delayed again. So best case scenario, we see some of the provisions that were implemented as pay force in the big bill be delayed like the dish cuts were under the Affordable Care Act, and we’re able to use our trust fund balance to mitigate some of the impacts to providers and citizens and leverage finance federal financial participation To through shared goals with the federal government during our waiver negotiations in Congress, authorizes some funding to mitigate the premium impacts associated with the enhanced subsidy expiration that Troy discussed. Worst case scenario is they implement everything to the disadvantage of New York and impose additional cuts. So that’s now I’ll move to the second part of my answer to this question, which is because the impacts of the bill and the various regulations are phased in over time, meaning not everything happens at once, but some actions take take effect later. For example, the work requirements which go into effect in 2027 New York will have the ability to have a prolonged conversation with decision makers and stakeholders on how to implement and mitigate the impacts of these changes. I don’t think we’ve seen the last of them. There’s still the potential for a rescission bill impacting health care as well as an additional reconciliation in the current Congress, New York is 10% of the national Medicaid program, so any changes that they make are likely to have a similarly significant impact to New York in the way that the changes we’re currently Facing do.
Courtney Burke 28:40
Yes, and so I do look forward to continuing to work with the two of you to monitor all of what’s happening, because it is a lot to keep track of, and it has a very large impact on New York state, as well as the residents living in New York state. So looking forward to monitoring what’s happening, and really appreciate both your time today to talk through these important changes.
Troy Oechsner 29:05
Thank you. Thanks so much.
Jillian Kirby Bronner 29:07
Thank you very much. Courtney and the Rockefeller Institute is just doing a wonderful job keeping track of everything, and I’m pleased to be part of that.
Joel Tirado 29:17
Thanks again to Courtney Burke, Jillian Kirby Bronner, and Troy Oechsner for sharing their perspective on what to watch as the healthcare landscape shifts in response to changes at the federal level. If you liked this episode, please rate, subscribe, and share. It will help others find the podcast and help us deliver the latest in public policy research. All of our episodes are available for free wherever you stream your podcasts and transcripts are available on our website. I’m Joel Tirado; until next time.
Joel Tirado 29:51
Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation. Learn more at rockinst.org or by following RockefellerInst. That’s i n s t on social media. Have a question, comment, or idea? Email us at [email protected].
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