The Governor’s proposed 2013-2014 Executive Budget aims to get rid of New York’s Family Health Plus (FHP) program by closing off enrollment by the end of this year. Enrollees who earn below 138% of FPL (about $26,000 per year for a family of three) will get the current Medicaid benefit (with the exception of long-term care). Parents up to 150% of FPL (about $28,000 for a family of three) will get subsidized coverage on the forthcoming Exchange.
However, eligible folks who aren’t able to enroll by the cutoff date, or whose income shifts into the eligible range after the cutoff date will be out of luck. These folks will have to look for affordable coverage on the Exchange.
The Exchange will provide premium tax credits to help lower the cost of insurance for most low- and moderate-income folks who purchase coverage on the Exchange. But, it will still be too expensive for many families. For example, a family of three earning 150% of FPL will still have to come up woth $1,099 per year on their own for coverage on the Exchange whereas the same family would have gotten free coverage with very low cost-sharing through FHP.
But there is a solution to this affordability problem.
First, we ask the State to apply for an 1115 waiver – similar to those being pursued by Massachusetts and Vermont – to provide an affordability wrap for premiums and cost sharing for folks up to 200% of FPL not eligible for Medicaid. This would help to get out-of-pocket costs on the Exchange down as close as possible to FHP levels. If NY can’t get federal matching funds, the State should earmark a portion of the $2.5 billion in State Medicaid savings under the ACA for this.
Next, New York should lay the foundation for a Basic Health Plan (BHP) by authorizing establishment of this program starting in 2015. The ACA gives states the option of creating a federally-funded BHP to cover adults up to 200% of FPL not eligible for Medicaid. This program would result in State savings of between $500 million and $1 billion each year.
This is a big opportunity for State lawmakers to ensure affordable coverage is available to the individuals and families who need it most. And, when federal funds or state savings are factored in, it would require little or no additional cost to the State.
Quite simply, it’s the right thing to do.