Action Alert: One-House Budgets Released

The One-House Budgets are released! The Senate One-House Budget includes a significant portion of the HCFANY policy agenda, building on the Governor’s proposals in the Executive Budget. We’re still studying what is included in each bill, here’s what we know so far:

Good news: the Senate and Assembly One-House Budgets both:

  • Ban cost-sharing for insulin for enrollees in State-regulated health insurance plans
  • Improve affordability of Marketplace plans via premium assistance/ cost-sharing subsidies
  • Adopt Kids Coverage to ensure children up to age 6 remain continuously covered in Medicaid or Child Health Plus
  • Include Coverage4All, using federal funding to cover income-eligible immigrants in the Essential Plan

Even better, the Senate One-House Budget improves on the Governor’s budget by incorporating all of the HFAL improvements in the Ounce of Protection Act, including:

  • Expanding Hospital Financial Assistance eligibility to individuals making up to 600 percent FPL
  • Banning Hospitals from suing patients making under 600 percent FPL for medical debt
  • Incorporating time-limited debt repayment plans so patients who make an agreed upon number of payments don’t have to spend their lives in debt

Bad news: the Assembly Budget completely cuts the Governor’s proposed medical debt reforms.

Take Action: Use the Phone2Action tool to call your legislators.

  • Thank your Senators and ask them to fight to keep the Senate One-House Budget consumer health and medical debt reforms in the final budget.
  • Ask your Assembly members to tell Assembly leadership to fight medical debt and fix our broken Hospital Financial Assistance Law.

HCFANY is grateful to have had the opportunity to testify at the 2024 Joint Legislative Budget Hearing on Health. Our detailed written comments are linked here. The Executive Budget includes many positive proposals that will help protect consumers from medical debt and enhance their ability to access affordable health coverage, including:

  • Modernizing the State’s Hospital Financial Assistance Law
  • Eliminating all cost-sharing for insulin for New York State-regulated plans
  • Guaranteeing continuous health coverage for children up to 6 years of age
  • Improving subsidies and benefits for public health coverage
  • Informed consent for payment reform
  • Banning hospitals from suing patients with incomes below 400% of the federal poverty level

In addition to addressing these important reforms in the FY25 Budget, HCFANY also urges the Legislature to provide additional funding to ensure more New Yorkers can enroll in, and use their coverage, including:

  • Expanding Hospital Financial Assistance to 600% of the federal poverty level and incorporating time-limited debt repayment plans as would occur if the Ounce of Prevention Act (S1366B/A6027A) were enacted
  • Prohibiting state-operated hospitals from suing patients for medical debt by adopting the provisions of the Stop Suny Suing Bill (A8170/S7778)
  • Ensuring coverage for low-income immigrants with Section 1332 Waiver surplus pass-through funding
  • Funding Community Health Advocates at $5.5 million
  • Enhancing outreach funding for Navigators

After she rushed to a hospital-based urgent care facility with a painful tooth, Bebhinn was asked to pay $600 in fees and copays. Her Medicare did not cover dental, so she was denied care and sent to the emergency room where she waited for six hours to be seen.

After she got the care she needed, she was hit with a large ER bill. Instead of being offered financial assistance, Bebhinn now faces a barrage of calls from debt collectors.

In 2022, CSS found that New York’s nonprofit hospitals had sued more than 54,000 patients in just five years—many of whom should have been eligible for financial assistance. The analysis revealed that hospitals disproportionately sue patients who live in low-income zip codes or zip codes where the residents are mostly people of color.

The current HFAL requires all New York hospitals with funding from the State’s $1.1 billion Indigent Care Pool (ICP) to have a financial assistance application and policy. However, continued lawsuits and aggressive debt collection action against patients show that those eligible for financial assistance were not screened, were unable to complete the application process, or were improperly rejected.

New York’s health care landscape evolved significantly since HFAL was enacted in 2006, rendering the current law outdated and ineffective. For example, the current law only provides very modest discounts to patients with limited means (under 300 percent of the federal poverty level).  By contrast, the Affordable Care Act offers financial assistance to people up to 600 percent of the federal poverty level.  In addition, the HFAL requires that only the hospital, and not its providers, offer discounts to eligible patients. As private practices increasingly take over critical hospital functions like emergency rooms, uninsured patients increasingly receive undiscounted bills they are unable to pay.

A new brief by CSS, “An Ounce of Prevention: Reforming the Hospital Financial Assistance Law Could Save Pounds of Patient Debt,” outlines actionable steps to support low-income patients more effectively by updating HFAL. The authors of the brief recommend:

  1. Requiring a common financial assistance policy across all New York hospitals and providers;
  2. Aligning the current law with other health care programs by raising its eligibility level;
  3. Making discounts greater and easier to access; and
  4. Protecting patients from lawsuits and other aggressive collections actions while they are being screened for financial assistance.

The Ounce of Prevention Act (S1366/A6027), sponsored by State Senator Gustavo Rivera and Assemblymember Amy Paulin, would enact these critical reforms. If the law is passed, New York would follow the lead of several other states, including New Jersey and Illinois, which have recently enacted fairer financial assistance laws. Learn more about the Ounce of Prevention Act here.

Over a decade ago, New York State enacted Manny’s Law, which required New York’s non-profit hospitals to provide hospital financial assistance to low-income patients. The law is named after Manny Lanza, a young New Yorker with a brain condition who died after being precipitously discharged from a hospital because he was uninsured. Under Manny’s Law, hospitals must provide financial assistance to uninsured, low-income patients in exchange for receiving funds from the State’s $1.1 billion Indigent Care Pool. In 2012, the Department of Health began to audit the hospitals’ financial aid programs in response to reports of inadequate compliance.

A Freedom of Information Law request filed with the Department of Health shows that a decade later, hospitals still fail to comply with Manny’s Law—and, in fact, appear to be regressing, with the audit showing that they were less compliant in 2018 than they were the prior two years. The audit includes a list of questions that hospitals can pass or fail, and the chart below shows the total number of failed questions:

What kinds of problems did the audit reveal?

First, the audit found that a decade after the passage of Manny’s Law, many hospitals’ financial aid applications still include impermissible requirements that make it hard for patients to apply. For example, 17% of hospitals audited had incorrectly adopted a “Medicaid denial first” policy. Medicaid applications can take a lot of time to process. Requiring a patient to receive a denial before beginning the financial assistance process causes unnecessary delay for patients. Other impermissible hurdles to hospital financial aid revealed by the audit included requiring patients to provide their: past tax returns (14.3%); monthly bills and other financial obligations (13.1%); and Social Security numbers (12.0%).

Second, the audit found that many hospitals’ financial assistance policies do not protect low-income patients from extraordinary collections actions that are explicitly forbidden under state law because they are so harmful to patients. For example, one in five hospitals said that they allow accelerator clauses that mean missed payments trigger higher rates of interest (20.0%). Interest adds hundreds or thousands of dollars to medical bills that patients are already struggling to pay. (A bill to reform New York State’s onerous 9 percent judgment interest rate awaits Governor’s Hochul’s signature (S55724B/6474B).) Next, the audit reveals that hospitals are allowing collections agencies to pursue their patients without the hospitals’ written consent (9.1%). This means patients are hassled by debt collectors even while they are working on applying for financial assistance or otherwise trying to work with the hospital to pay their bill. Finally, hospitals’ policies do not explicitly prohibit forced sales or foreclosures on patients’ homes (7.4%).

Third, the audit found that hospitals apply asset tests when determining discounts, which is not allowed in almost any other health care affordability program in the state. And hospitals report that they continue to consider assets that the law says they are not allowed to consider, including a patient’s home (10.9%), retirement accounts (9.7%), college savings accounts (8.0%), and cars that anyone in the patients’ immediate family uses for their primary transportation (8.0%). This failure to comply with the law means eligible patients are denied help or are prevented from applying.

These failures to comply have serious consequences for patients who should have been protected by Manny’s Law and offered care at discounted rates. According to a 2019 poll, 45 percent of New Yorkers say they delay or avoid health care altogether because they cannot afford it. Thirty-five percent of New Yorkers say that obtaining necessary health care meant serious financial struggles such as using up all of their savings, being unable to pay for food or heat, and racking up large amounts of credit card debt. Over 52,000 New Yorkers have been sued by hospitals over medical bills they cannot afford over the past five years. Hospitals then place liens on patients’ homes and garnish their wages.

Make Manny’s Law a Reality: Fix the Hospital Financial Assistance Law

What should New York do about this? One simple change is to require hospitals to use one standard application form to be developed by the state. This would obviate the need for the Health Department’s audits of a failing system that lets every hospital design and implement its own policy. Other states already do something like this. For example, Massachusetts uses its state Marketplace to award hospital financial assistance. Advocates have recommended the adoption of a single application form  for years and so has  the Department of Financial Services Health Care Administrative Simplification Workgroup – a multi-stakeholder group of healthcare experts. It was also proposed in last year’s Patient Medical Debt Protection bill.               

After all these years, patients need our healthcare system to be simpler and more accessible. That remains the unfulfilled goal of Manny’s Law. Adopting one uniform statewide Hospital Financial Assistance form, to be used by all of New York’s hospitals, would be an important first step in leveling the playing field between patients and healthcare providers.