New York: Public Option Program
Upshot
Democratic state legislators introduced A. 10644 to establish a public option program in New York.
New York operates a robust individual market with 12 plans participating on the state-based Marketplace. The state also features certain consumer protections and affordability measures, including a Basic Health Program.
The bill was introduced by a Democratic Senator in August 2022, though this was after the end of the state legislative session. It was then referred to the Committee on Health. The bill is expected to be reintroduced during the next legislative session in 2023.
Background
New York operates one of the most robust individual health insurance markets in the U.S. Twelve carriers offer individual market plans in 2022. On average, premium rates increased by 3.7 percent in 2022. New York has implemented several changes to support individual market consumers. Highlights include:
Actuarial value: New York requires plans to have a higher actuarial value than what is required by federal government regulations. This means that plans in New York must generally cover a larger share of medical expenses for their enrollees as compared to what they would otherwise have to cover under standard federal requirements. See a comparison below.
Plan requirements: New York requires health insurers to continue offering plans on the Marketplace in order to keep their Medicaid, Basic Health Program, and Child Health Plus contracts. In other words, participating in the Marketplace is a requirement for plans to participate in Medicaid, CHP, and Child Health Plus. Insurers must also offer one standard plan design in each metal tier and may offer up to three non-standard plan designs for each metal level.
Pregnancy: New York offers a special enrollment period for pregnant people, meaning that becoming pregnant is considered a qualified event for enrolling in an individual Marketplace plan.
While not directly related to the Marketplace, New York also operates a BHP program. This program allows the state to offer affordable health coverage for consumers between 138 and 200 percent FPL, as well as for consumers with incomes below 138 percent FPL who are lawfully present in the U.S.
Summary
The bill would establish a public option program in New York. This means that the state would be required to establish and administer a program to provide a comprehensive health insurance coverage option to compete alongside private health insurers in the state. Additional details follow.
Board: The bill would create the board of the New York State public health care option program. At the request of the commissioner, the board would develop and submit recommendations related to the implementation of the program. The board would consist of 13 appointed trustees and would meet at least four times each year. Within one year of enactment, the board would be required to submit specific recommendations on whether any additional revenue, taxes, or assessments are necessary to implement the program.
Premiums: The commissioner would be required to establish premiums that ensure the viability of the public option program but that maximize affordability for members. Premiums would be adjusted based on household size and income. The commission would also set benchmark goals for premiums that would aim to be below comparable commercially available plans.
Eligibility: Every resident in New York would be eligible to enroll in the public option program. Those with employer-sponsored insurance would be eligible to purchase coverage through the program as well. However, doing so may not make sense financially because of the employer coverage firewall that prevents people with access to affordable employer-sponsored coverage from receiving federal premium tax credits. The commissioner would specifically be directed to develop an enrollment process for employers with less than 100 employees to participate in the program.
Payment rates: The commissioner would develop payment methodologies and rates for health care services furnished by participating providers, including a methodology for reasonable and customary fees for out-of-network health care services.
Provider participation: Provider participation in the program would not be mandatory. The commissioner would establish criteria and standards for providers to be qualified for participation in the program as well as grounds for revocation.
The bill would also establish a “New York state public health care option program fund.” Funding would consist of all revenue received through premiums, co-insurance, or other related fees from enrolled members, as well as any federal payments received, or state funds transferred to the fund. All funding would be expended for the purposes of operating the public option program.