New York: Basic Health Plan Buy-In

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.

Minnesota: Basic Health Program Buy-In

Minnesota: Basic Health Program Buy-In

Upshot

• H.F. 4706 would allow individuals with an income that currently exceeds 200 percent FPL to enroll in MinnesotaCare, the state’s basic health program. Most enrollees, except for children under the age of 21, would be required to pay a monthly premium based on a sliding fee scale.

• The bill would also require the Minnesota Commissioner of Human Services to establish a smaller employer public option that leverages MinnesotaCare, beginning with recommendations for an implementation plan

• A related bill, H.F. 11, included provisions to establish transition programs to promote affordability for consumers in the individual market leading up to the establishment of the BHP buy-in. These provisions were not included in H.R. 4706, which was reported out of the committee level but ultimately did not pass.

Background

Minnesota adopted the ACA Medicaid expansion. Therefore, all adults with an income up to 138 percent FPL are eligible for Medical Assistance (MA), the state Medicaid program. Minnesota does not offer a Medicaid buy-in program for working people with disabilities.

Minnesota also offers MinnesotaCare, a BHP that provides health care coverage for people who earn too much to qualify for Medicaid but whose income is up to 200 percent FPL. The individual must also be a Minnesota resident, a U.S. citizen or lawfully present in the U.S., not enrolled in Medicare, and not incarcerated. MinnesotaCare delivers benefits through managed care organizations. As required, MinnesotaCare covers the EHBs. Most MinnesotaCare members pay a monthly premium based on a sliding fee scale, up to an $80 monthly premium per person. The following enrollees have no premium: children under the age of 21, Americans Indians and Alaska Natives and their households, and certain military members (for up to 12 months). Some members 21 years and older are also required to pay cost sharing toward their medical costs.

In addition, Minnesota operates MNsure, a state-based health insurance Marketplace. MNSure is a robust individual market, with five health insurance companies offering qualified health plans. In 2022, consumers in every county can chose from at least 22 different qualified health plans. During the 2022 open enrollment period, 125,507 signed up for private health coverage through MNSure. This roughly 10 percent increase from the 2021 open enrollment period is due in part to increased access to APTCs. Fifty-seven percent of enrollees received APTCs averaging $517 in monthly savings on premiums. Minnesota also operates Minnesota Premium Security Plan (MPSP), a reinsurance program, through a section 1332 waiver, which has lowered premiums by about 20 percent on average.

Summary

H.F. 4706 would allow families and individuals with incomes above 200 percent FPL to enroll in a buy-in option for MinnesotaCare, beginning January 1, 2025, or upon federal approval. Eligibility would be limited to a family or individual that does not have access to an employer-sponsored plan that is affordable and provides minimum value, as defined under federal regulations. Similar to MinnesotaCare, the MinnesotaCare buy-in option would require members to pay a monthly premium based on a sliding fee scale established by the Minnesota Commissioner of Human Services. Children under the age of 21 would have no premiums.

In addition, the bill would require the Minnesota Commissioner of Human Services to establish a small employer public option that leverages MinnesotaCare. This option would be limited to employers with fewer than 50 employees. The bill does not prescribe the structure of the small employer public option. Instead, the bill asks the Commissioner to determine “whether the employer makes contributions to the commissioner directly or the employee makes contributions through a qualified small employer health reimbursement arrangement or other arrangement.” The commissioner would be required to present the recommendations for a small employer public option by December 15, 2023.

Finally, the bill would require the Commissioner of Human Services to develop an implementation plan for the MinnesotaCare public option program, which must include:

• Recommendations for any changes to the MinnesotaCare public option necessary to continue federal basic health program funding or to receive other federal funding;

• Recommendations for implementing any small employer option that would allow any employee payments toward premiums to be pretax;

• Recommendations for ensuring sufficient provider participation in MinnesotaCare;

• Estimates of state costs related to the MinnesotaCare public option; and

• Draft legislation that includes any additional policy and confirming changes necessary to implement the MinnesotaCare public option and the implementation plan recommendations.

The implementation plan would be due by December 15, 2023. By January 15, 2024, the Commissioner of Human Services would also have to present a report comparing service delivery and payment system models for MinnesotaCare. The report would have to compare the current model with two alternative models. At least one of the models must include a state-based model in which the state holds the plan risk as the insurer.

A related bill, H.F. 11, included provisions to establish transition programs to promote affordability for consumers in the individual market leading up to the establishment of the BHP buy-in. These provisions were excluded from H. 4706. A brief overview of the transition programs included in H.F. 11 is provided in the table below.