New York: Basic Health Program Buy-In
Upshot
S. 9508 would raise eligibility for New York’s BHP from 200 percent FPL to 250 percent FPL and would create an option for individuals or small group organizations to buy into the BHP.
The BHP, called the Essential Plan in New York, is a lower-cost option on the New York State of Health, the state’s health insurance Marketplace. The buy-in option would require premiums and cost-sharing for individuals with incomes greater than 500 percent FPL. Small groups would possibly have to pay a premium supplement once enrollment reaches 100,000 individuals if the state finds it necessary to increase funds
The bill died at the end of the legislative session
Background
The New York State of Health is a state-based Marketplace that covered about 221,000 people in 2022 and included twelve carriers. Premium rates increased by 3.7 percent on average in 2022. In an effort to ensure a variety of options are available for consumers, the state requires carriers to provide a plan on the Marketplace as a condition of participating in Medicaid and BHP.
Since 2016, New York has operated a BHP called the Essential Plan for 1) individuals under age 65 with incomes between 138 percent and 200 percent FPL, and 2) lawfully residing non-citizens with incomes 0-200 percent FPL who are not eligible for Medicaid due to immigration status. In 2021, New York eliminated all premiums in the Essential Plan and added free dental and vision benefits. Compared to a QHP in 2021, Essential Plan enrollees paid $1,600 less in out-of-pocket costs. As of May 2022, 986,000 individuals were enrolled in the Essential Plan.
Summary
This legislation would create the option for individuals and small groups to buy-in to the existing BHP. The bill would also raise the income limit for eligibility for the non-buy-in BHP from 200 percent FPL to 250 percent FPL and open enrollment to all individuals who meet income requirements, regardless of immigration status. Additional components to the proposed BHP program follow.
Eligibility: New York residents with incomes greater than 250 percent FPL and who are not eligible for Medicaid or Medicare would be able to purchase coverage from a basic health program through the buy-in option. Small groups that employ or cover 100 individuals or fewer would also be eligible.
Premiums: Individuals or small groups who utilize the buy-in option would pay the regional per-member-per-month premium payment received by a basic health program for providing program services in that region. There would be no deductible for any income level and no cost-sharing for individuals with household incomes less than 500 percent FPL. The cost-sharing must be a fixed cost (not a percentage) intended to be as affordable as possible and not exceed $200 for any covered service. Cost sharing for individuals with incomes greater than 500 percent FPL would vary based on income.
The state would be required to contract with an actuary to make recommendations around premiums and cost sharing. The actuary would be required to consider rates of payment relative to expected case mix, projected scope and utilization of covered services, and the provider network. The actuary would then recommend premium supplement amounts that the Commissioner may impose on small organizations and certain individuals.
Individual premiums: The Commissioner of the Department of Health would be encouraged to take action to offset premium costs for individuals with household incomes less than 500 percent FPL including by seeking authority to use subsidies such as APTCs and CSRs which is not currently allowed under federal regulation. Table 1 summarizes premium requirements at different income levels:
Small group premiums: Small groups that purchase coverage under this option for an individual would have the option to contribute to employee premiums. Additionally, small groups would be required to pay premium supplements for the individuals they cover based on the decision of the Commissioner. Payments would be made directly to the BHP on an aggregate basis and be used to ensure deficit neutrality and program viability.
Additionally, once enrollment in the buy-in option has reached 100,000 individuals either individually or from small groups, the Commissioner would be authorized to determine whether small group employers may be required to pay premium supplement payments for individuals for whom they contribute coverage costs. The bill sponsors say this option would only be implemented if it becomes necessary to increase state share funds and, if this option is used, the Commissioner would ensure that it does not undermine the viability and affordability of the program.
Report Requirements: Under current law, the Commissioner delivers an annual report on the BHP that can be used to inform future policymaking by the legislature. If this proposal were implemented, the Commissioner’s annual report would newly include an analysis of:
The impact of BHP on health care affordability for “middle class” New Yorkers;
The impact on population trends in the state;
The impact of BHP payment rates on hospital finances and financial sustainability; and
Recommendations to address concerns based on migration from the commercial insurance market to the BHP.