One of the biggest things at stake for New Yorkers in the political drama in Washington over the fate of the Affordable Care Act is its impact on funding for Medicaid, a program that now provides health coverage for almost 165,000 residents of Orange, Ulster and Sullivan counties – more than a quarter of the population.

Republican proposals to repeal and replace the 2010 law, better known as Obamacare, would affect health care in a multitude of ways. It would lift the mandate that Americans have insurance, change the subsidies that help some pay for it, and cause the number of people with coverage to plunge by as much as 23 million over the next decade, according to the Congressional Budget Office.

But the aspects that have generated the most political friction, and that might affect the most people, in New York are those dealing with Medicaid. The government insurance program expanded its reach under the Affordable Care Act and now covers nearly one in three New Yorkers. Pending bills in Congress would cut or cap New York’s Medicaid funding in four separate ways. Jason Helgerson, the state’s Medicaid director, told the Times Herald-Record last week that he estimates those changes, once fully phased in, could cost the state as much as $8 billion or $9 billion a year, for a program that costs $65.5 billion this year.

The result is a sharp debate over Medicaid’s role and cost and the effect that “Trumpcare” would have on its beneficiaries and on hospitals in New York.

Helgerson argues the cuts would reverse coverage gains New York has made and have a devastating effect on upstate hospitals and the local economies they support. 

“Medicaid is the biggest payer of health care services in New York,” he said, arguing that reducing that funding would force hospitals to lay off employees or even close. In rural areas where those operations are the largest employers, the impact could trigger a ripple effect on the economy, Helgerson said.

Rep. John Faso, the Republican freshman whose district includes Ulster and Sullivan counties, has been prominent in the debate because of a bill amendment he sponsored that would force New York to stop requiring its counties outside New York City to shoulder part of the Medicaid expenses. He argues that the federal government must slow Medicaid’s spending growth because the current pace is “not sustainable,” and that New York would adjust to the changes without the dire consequences that Gov. Andrew Cuomo and other critics predict.

But he also suggests the Medicaid program itself has grown beyond its original purpose and now covers more people than it should.

“We now have about one third of New York’s population on Medicaid,” Faso said. “Some people in Albany may look upon that as an accomplishment. I look upon that as a failure.”

Local impact

From Warwick to Woodstock, from Newburgh to Callicoon, households and a variety of institutions rely on Medicaid to pay for costly services.

It pays for child births and dental care and diabetes drugs in densely populated areas where poverty is concentrated, places like Newburgh and Kiryas Joel, but also in largely rural areas like Sullivan County, where one in three residents is enrolled in Medicaid.

It pays for services for people with disabilities, such as children with autism at the Center for Spectrum Services in Kingston and Ellenville.

It is a primary funding source for the elderly and infirm living in 21 nursing homes with 3,100 total beds in Orange, Ulster and Sullivan counties.

It pays for addiction treatment in the midst of a national heroin and prescription pill epidemic.

Frank Petrucci, a 28-year-old Warwick resident who suffers from a rare, debilitating disease, relies on Medicaid to pay the $50,000 bill each time he goes to the hospital for an intravenous drug treatment to prevent his condition from getting worse, at intervals of six weeks or two months. Without those treatments, the disease is likely to progress and make him more and more incapacitated, taking away his ability to take care of himself, drive and work part-time. A national rower before his ailment set in, Petrucci coaches several times a week at the East Arm Rowing Club in Greenwood Lake. 

Whether and how a reduction in Medicaid funding would affect his coverage is uncertain. Petrucci, who has closely watched the legislative debate as it unfolds in Washington, said he’s covered now because of his low income. If the state is forced to curtail eligibility for his income level, could he qualify instead because of his disability? Would he have to allow his condition to worsen without treatment until he was disabled enough? Would the wait for disability coverage require him to go even longer without treatment?

“If that’s removed, then my world becomes a smaller place,” Petrucci said, referring to the loss of mobility he would likely suffer.

What he knows for sure is that he’s an expensive patient and probably will remain so for many years. “I’m young, and this disease is most likely a lifelong disease,” he said.

Heated debate

The amendment Faso sponsored with Rep. Chris Collins would force the state to absorb the $2.3 billion that 57 counties now spend on Medicaid or else cut that amount from its spending. Faso argues that imposing a cost share on New York’s counties when Medicaid began 51 years ago was a bad mistake, one that now helps drive up property taxes and cause residents to leave New York. Shifting the counties’ expense to Albany is “restoring responsibility,” he said.

Faso contends the state could shoulder that responsibility by cutting waste and fraud from Medicaid and other unnecessary state spending. He dismissed Cuomo’s contention that the state might recover the lost revenue from its counties in some other manner, saying the Legislature would never approve it.

“It’s time for him to man up and do what 49 other governors have done,” Faso said.

On a broader level, Faso said that increased dependence on Medicaid is “not a desirable thing,” and that government should be “striving to get people into private insurance.”

“It was not meant to be an insurance policy for able-bodied adults,” he said.

Helgerson counters that at a time when fewer employers give their workers health insurance, Medicaid has helped the state cut its rate of uninsured residents in half, a feat it celebrates without apology.

“Does Congressman Faso want to double the uninsured rate in New York?” he asked.

Bill Hammond, director of health policy for the Albany-based Empire Center for Public Policy, said he sympathizes with Republicans’ quest to control Medicaid spending, which he said is “growing faster than our ability to pay.” He also agreed with Faso that New York’s Medicaid program contains a “fairly large amount of waste” – as any public or private insurance program does.

But he pointed out that cutting Medicaid spending to absorb the county costs would have a double impact, since the state would then lose a dollar-for-dollar amount in federal funding. And he argued that the legislation under debate in Washington would have to offer Medicaid enrollees enough financial support for private insurance to make that a “reasonable alternative.”

“It’s just unreasonable for them to find a couple thousand dollars a year to buy health insurance,” Hammond said.

Rep. Sean Patrick Maloney, the Cold Spring Democrat whose district includes Orange County, argues that Republicans undermined their rationale for cutting Medicaid spending growth as a fiscal necessity by proposing to eliminate two taxes on high-income earners in the same legislation. Their position would have more integrity, he said, if the savings had been used to balance the budget.

“This whole thing is a scheme to cut taxes for the rich,” he said.

Maloney applauded the drop in New York’s uninsured rate – to 4.5 percent from 9.5 percent – and said 55,000 people in his district alone had gotten coverage through the Medicaid expansion.

“Maybe John Faso thinks too many people have health care,” he said. “I don’t.”

cmckenna@th-record.com