Worries rise over federal health care funding

Sep 28, 2017

The latest version of a plan to repeal and replace the Affordable Care Act is now dead in Congress, but New York Gov. Andrew Cuomo remains worried about another potential cut in federal funds to hospitals that he said would blow a hole in the state budget.

The money is known as the Disproportionate Share Hospital fund, or DSH, and the money goes to public hospitals and safety net hospitals that often serve the poorest patients.

The fund is supposed to help cover health care costs for the uninsured. It ends at the conclusion of the federal fiscal year on Saturday unless Congress renews it. So far, no action has been taken by the House or Senate.

Cuomo called the potential cut “a dagger in the heart of New York.”

“It will devastate the health care system,” said Cuomo, who added the state could lose $2.6 billion over the next several years.

“Every hospital will be affected,” he said. “The greatest pain will be felt by the public hospitals, who treat the most needy patients.”

He told business leaders on Sept. 25 that the loss could derail the state’s spending plan.

“The budget is gone, throw it out the window,” Cuomo said.

The governor said that he might have to call the Legislature back.

“We might even have to do a special session,” he said.

When the ACA was enacted in 2010, the fund was intended to be phased out over time. That’s because the ACA, also known as Obamacare, was supposed to reduce the number of uninsured people through the creation of health care exchanges and other Medicaid programs and subsidies. In New York, about half of those who were uninsured before the ACA now have health insurance.

But Congress has renewed the funding three times. The most recent extension came in the spring of 2015, nearly two-and-a-half years ago, and is set to expire on Saturday.

Bill Hammond, health policy analyst for the fiscal watchdog group The Empire Center, said the possible funding cut should not come as a surprise to Cuomo.

“The state has been fully apprised that these cuts were coming for quite a long time,” Hammond said. “I’m a little bit confused as to why the governor would be caught off guard by this and would be talking about a special session.”

He said Cuomo and the Legislature already have approved one new budget since President Donald Trump was elected, and they’ve heard the promises of the Republican-dominated Congress to repeal and replace Obamacare — an effort that has so far failed.

“This is the kind of thing that the state should be planning for and preparing for in its long-term budgeting,” Hammond said.

Hammond said the cuts, if they occur, would not take effect right away, even if the funding is not renewed in October. He said there’s considerable lag time before hospitals and other health care facilities get payments from the federal government.

And he thinks there’s a good chance that Congress will renew the funds.

“Virtually every member of Congress has at least one hospital, if not multiple hospitals, in his or her district,” Hammond said. “They are undoubtedly hearing from those hospital officials; they are very influential people in their communities. It’s the kind of issue that crosses party line.”

He said the major bills by Republican members of Congress to repeal and replace the ACA actually included a continuation of the DSH funding for the uninsured.

Trump struck an agreement in early September with Rep. Nancy Pelosi and Sen. Chuck Schumer — the Democratic minority leaders in the House and Senate — to adopt a continuing resolution to maintain the current rate of government spending past the Oct. 1 beginning of the federal fiscal year.

New negotiations will not begin until mid-December, so it’s possible that Congress may simply put off dealing with the DSH funding until then.