Implementing Federal Health Care Reform: A Roadmap for New York State

8/9/2019 Implementing Federal Health Care Reform: A Roadmap for New York State

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ImplementingFederal Health

Care Reform:A Roadmapfor New York State

A 2010

Prepared byPatricia Boozang, MPHMelinda Dutton, JDAlice Lam, MPAManatt Health olutions

Deborah Bachrach, JDNew York tate Health FoundationVisiting Fellow


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I t d tI 14

Public overage Provisions 6Medicaid Expansion 6Changes in Medicaid Eligibility and Enrollment Rules 13Maintenance o E ort 16Changes to the Childrens Health Insurance Program (CHIP) 17

S a e Heal h Insurance xchanges 20

Structure and Responsibilities o the Exchange 20Essential Benefts Package 23Subsidies 26Qualifed Health Plans 28Technical and Financial Consumer Assistance 31

Basic Heal h Program 32

In ivi ual an mployer Man a es 35Individual Responsibility 35Employer Responsibilities 36

Priva e overage Provisions 37Temporary High-Risk Pool Program 38Reinsurance and Risk Adjustment Provisions 42Premium Rate Review 46Medical Loss Ratios 48New Insurance Standards or Health Plans 51

Contents

Implementing Federal Health Care Reform: A Roadmap for New York State


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SS t F I S d d I S d w Y k S 59

nhancemen s for Me icai Paymen s for Primary are 60e uce Fun ing for ninsure are in Public an olun ary Safe y e Hospi als 61

Medicaid Disproportionate Share Hospital Funding 62Medicare Disproportionate Share Hospital Funding 63Medicaid Global Payment System Demonstration Project 63Additional Requirements or Charitable Hospitals 64

ommuni y Heal h en ers 64

School-Base Heal h en ers 66

Primary are x ension en er Program 67

wor force 69

Provisions to Facilitate the Planning and Implementation o Work orce Development Strategies 69Provisions to Increase the Supply and Enhance the Training and Education o Health Care Pro essionals 69

P YM t d d LI Y SYSt M F M 72Mul i-Payer delivery Sys em eform Ini ia ives 72

Center or Medicare and Medicaid Innovation 72Federal Coordinated Health Care O fce 73

Me icai delivery Sys em eform ppor uni ies 73Payment Adjustment or Health Care-Acquired Conditions 74Elective Demonstration and Pilot Opportunities 74

Provider and Consumer Targeted Grant Programs to Support Medicaid Re orm 77Me icare delivery Sys em eform ppor uni ies 78

dual ligibles 79Five-Year Period or Dual Eligible Demonstration Projects 80Extension o Special Needs Plan (SNP) Program 80

Long-term are 80CLASS Program 81Payment and Care Delivery Demonstration, Grant, and Pilot Programs 82

PP dIX 84c no le gemen s 87

Contents (continued)



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t BL S, H tS, d FI S

Ab 1. How Will Federal Health Care Re orm A ect Coverage in New York State? 5Ab 2. Current New York State Income Eligibility Levels 7Ab 3. Comparison o Benefts 9Ab 4. FMAP or Currently Eligible and Newly Eligible Childless Adults 10Ab 5. New York State CHPlusPremium Subsidies 17Ab 6. Current Eligibility Levels or CHPlus 18Ab 7. Exchange Functions 22Ab 8. New York State Mandated Benefts Compared to ACA Essential Benefts 24Ab 9. ACA Premium Subsidy Levels 27Ab 10. ACA Cost-Sharing Reductions or Lower-Income Families 27Ab 11. New York State High-Risk Pool Proposed Beneft Package 39Ab 12. Reinsurance, Risk Corridor, and Risk Adjustment Program 43Ab 13. Medical Loss Ratio Requirements 50Ab 14. Dependent Coverage 54Ab 15. Aggregate Reductions in Medicaid Disproportionate Share Hospital Payments 61Ab 16. Community Health Centers and the National Health Service Corps Fund 65Ab 17. ACA Scholarships and Loan Programs 70Ab 18. ACA Training and Education Grants 70Ab 19. New York State Programs or Dual Eligibles 80

Ab 20. New State Options and Demonstration Programs Related to Long-Term CareAvailable under Health Re orm 82

Ab 21. Medicaid Take-Up Scenarios 83

A IMp M N A I N: CHA 1.Medicaid Expansion 12A IMp M N A I N: CHA 2.Changes in Medicaid Eligibility Rules 15A IMp M N A I N: CHA 3.Maintenance o E ort 17A IMp M N A I N: CHA 4.Enhanced Federal Support or CHIP 19A IMp M N A I N: CHA 5.Health Insurance Exchange 29A IMp M N A I N: CHA 6.Health Insurance Consumer Assistance 31

A IMp M N A I N: CHA 7.Basic Health Program 34




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t BL S, H tS, d FI S (con inue )

A IMp M N A I N: CHA 8.Requirement to Maintain Minimum Essential Coverage 36A IMp M N A I N: CHA 9.Shared Responsibility or Employers 37A IMp M N A I N: CHA 10.Temporary High-Risk Pool 41A IMp M N A I N: CHA 11.Transitional Reinsurance Program or Individual

Markets in Each State 44

A IMp M N A I N: CHA 12.Federal Risk Corridors or Plans in Individual andSmall Group Markets 45

A IMp M N A I N: CHA 13.Risk Adjustment 46A IMp M N A I N: CHA 14.Premium Rate Review 47A IMp M N A I N: CHA 15.Medical Loss Ratio 51

A IMp M N A I N: CHA 16.Medicaid Primary Care Reimbursement 60A IMp M N A I N: CHA 17.Community Health Centers and the National Health

Service Corps Fund 66

A IMp M N A I N: CHA 18.School-Based Health Centers 67A IMp M N A I N: CHA 19.Primary Care Extension Center Program 68A IMp M N A I N: CHA 20.State Option to Provide Health Homes or Enrollees

with Chronic Conditions 76

FI 1. Health Coverage through the Exchange: Essential Benefts Package 25




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Introduction

The Patient Protection and A ordable Care Act, and subsequent amendments underthe Health Care Education and Reconciliation Act o 2010 (collectively re erred toas the ACA), is sweeping Federal legislation designed to bring about near universalcoverage, and trans orm how health care is provided and paid or throughout

the United States. For New York, Federal health care re orm brings signifcant new unding tothe States Medicaid program, creates a ramework or expanding health insurance coverageand establishes new program authority and unding that will allow the State to drive signifcantdelivery system re orm. As a result o Federal health care re orm, 2.23 million New Yorkers,or 85% o the total non-elderly uninsured in the State, will have access to health insurance;and more than 1 million uninsured New Yorkers are expected to obtain health coverage. 1

While the ACA provides a national ramework or re orm, much o the responsibility orimplementation alls to the states. As New York embarks upon health re orm implementation,it starts with many strengths. New York is an innovator state, one o a small group o statesthat has led the nation in terms o health care coverage. Over the past decade, New York hasleveraged Federal unding to expand eligibility in its public insurance programs well beyondthose populations mandated by Federal law. While the ACA requires state Medicaid programsto cover childless adults or the frst time in 2014, New York has decades o experienceproviding coverage to this population. New York is home to one o the frst and most robustChild Health Insurance Programs (CHIP, or Child Health Plus in New York) in the nation, andhas dedicated signifcant resources to streamlining public health insurance eligibility systemsand establishing outreach and enrollment assistance programs or public coverage. In theprivate insurance market, New York already has in place many o the ACA insurance re ormsdesigned to protect consumers and enhance access to private insurance coverage. New York isa guaranteed issue state, thanks to State laws that require plans to sell coverage regardlesso health status or demographics o the applicant. New Yorks community rating laws exceedeven the new Federal standards, which prohibit discrimination in price based on anything otherthan amily composition, geography, age, or tobacco use.

Yet New York aces signifcant challenges in implementing re orm. The enormity andcomplexity o the Federal law is daunting or all states, and the need to reconcile New Yorkshighly evolved regulatory and public coverage in rastructure with ACA mandates increasesthe complexity exponentially. Further, New York, like most states, is in the midst o a severebudgetary crisis that threatens to erode reimbursement rates or providers under existingpublic coverage programs, limit available resources or necessary in rastructure investments

1 For he purposes of his paper, e rely on he a e-up ra es for he ne ly Me icai eligible, an Me icai eligible bu uninsure popula ionsevelope by he rban Ins i u e for he kaiser ommission on Me icai an he ninsure . Holahan, John an Irene Hea en. Me icai overage

an Spen ing in Heal h eform: a ional an S a e-by-S a e esul s for ul s a or Belo 133% FPL. kaiser ommission on Me icai an heninsure . May 2010. vailable a : h p:// . ff.org/heal hreform/uploa /Me icai - overage-an -Spen ing-in-Heal h- eform- a ional-an -

S a e-By-S a e- esul s-for- ul s-a -or-Belo -133-FPL.p f.


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Introduction (continued)

including in ormation systems, and shrink the very government agencies that will be chargedwith implementing re orm. New leadership at the States helm starting in January 2011 willhave scarcely three years to design and implement changes necessary to meet Federaldeadlines. And, these changes will be pro ound, requiring amendments to State statute,repeal o existingand issuance o newhealth and insurance regulations, the creation onew public and/or private governance entities, and the wholesale restructuring o longstandingstatewide in rastructure and administrative systems.

Finally, the ACA includes a multitude o payment initiatives designed to improve the qualityo care and slow health care cost growth. It is widely recognized that the way the nation pays

or care encourages volume and not value. The ACA seeks to change this, making providersaccountable or coordinating the care o their patients and rewarding better outcomes.Nowhere is this more important than in New York, where health care costs are among thehighest in the nation and measures o health care quality too o ten lag. New York will want

to ensure that the State and stakeholders secure Federal unding to support delivery systemreengineering, including the expansion o the primary care work orce.

This report provides a health care re orm implementation roadmap or New York State,summarizing the major provisions o the ACA, analyzing their implications unique to the State,and outlining the key implementation tasks and issues that New York will con ront as it beginsACA implementation. ACA provisions are organized into three areas: Coverage, Access forthe Insured and ninsured, and payment and Delivery ystem eform . These three issue areasare inextricably linked, the success o health re orm being dependent on their coordinatedimplementation. Coverage expansions, re orms, and mandates serve as cornerstones to re orm,dramatically reducing the number o the uninsured, spreading the risk and costs o insuranceacross a greater and healthier pool o New Yorkers, and ensuring that health care providers

have a reliable reimbursement mechanism to pay or their services. Access provisions, aimed atexpanding the health care work orce and health care in rastructure, seek to ensure that healthcare providers are equipped to meet the rising demand or health services that is expected toaccompany expanded coverage. Finally, re orm o the States delivery system is necessary toimprove the quality and e fciency o health care delivery to ensure that coverage is a ordable andsustainable or employers, consumers, and State and Federal governments alike. The specifcchanges described in this report or each area are summarized below.

Coverage: The ACA establishes a ramework or expanding health insurance coverage.The report summarizes ACA provisions that: (i) expand New Yorks public health insuranceprograms; (ii) create a new health insurance exchangea marketplace to connect consumersand employers to insurers; and (iii) make private health insurance more accessible.


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Introduction (continued)

Access for the Insured and the ninsured: ACA changes in unding or primary care providers,the sa ety net delivery system, and the health care work orce are designed to enable states toensure appropriate access to care or newly insured and those who remain uninsured by choiceor because o eligibility or a ordability constraints. The report outlines new reimbursementmethodologies that invest in primary, community-based care, unding mechanisms designedto drive unding or uncompensated care to high-need sa ety net providers, and new undingstreams to support health care work orce development in the State.

payment and Delivery ystem eform: The report concludes with a discussion o the myriadpayment and delivery system re orm initiatives authorized and unded by the ACA. Specifcally,this section highlights opportunities or New York to attract Federal unding that will supportinnovation in the States health care delivery system.

For each major provision discussed in the report, a summary table outlines the main eatureso the provision, its e ective date(s), the entities responsible or implementation, and thespecifc tasks and issues acing New York State as it moves orward with implementation.

New Yorks path to ACA implementation will be unique. Success will depend on the ability oState government leaders and their partners in the private sector to marshal the substantiveexpertise, political will, and human and fnancial resources necessary to capitalize on theopportunities presented by Federal re orm to achieve trans ormative change. This reportprovides a starting point or that collaboration.


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The ACA makes sweeping changes that impact the availability, a ordability, and

unding o health insurance coverage in the United States, establishing a rameworkor near-universal coverage over the next decade. The re orm law expands Medicaid

and reconfgures eligibility standards under the program, mandates the creation o ahealth insurance exchange in each state through which individuals and businesses can purchasehealth insurance coverage, provides subsidies to eligible consumers to improve a ordability oinsurance coverage, and mandates a wide range o re orms to commercial insurance markets.

Today, there are 2.6 million uninsured children and non-elderly adults in the State. O these, 1.1million (42%) are currently eligible or Medicaid but uninsured, 1.1 million (42%) are not eligible orMedicaid due to their amily incomes, and almost 400,000 (15%) are undocumented immigrants.

With the implementation o ACA public coverage and exchange provisions, a large majorityo uninsured New Yorkers will be eligible or ree or subsidized health insurance. Most o the1.1 million New Yorkers who were eligible or Medicaid pre-ACA, but unenrolled, will remaineligible. An estimated 90,000 individuals will become newly eligible or Medicaid. Nearly700,000 New Yorkers are estimated to become eligible to receive tax subsidies to purchasecoverage through the exchange. An additional 340,000 uninsured people are estimated tobecome eligible to purchase coverage through the State exchange without Federal subsidies. 2

The ACA provides historic and substantial opportunities to make a ordable health insurancecoverage a reality or New Yorkers. As many as 1.2 million New Yorkers are projected tobecome newly insured once ACA is ully phased in, based on estimated participation rates.Predictions o how many individuals will participate in the coverage options available to themvary. The Kaiser Commission on Medicaid and the Uninsured, or example, estimates take-up among those newly eligible or Medicaid and those Medicaid eligible but unenrolled usingtwo scenarios: a standard scenario, assuming take-up o 57% among the newly eligible

or Medicaid and 10% among those eligible or Medicaid but unenrolled, and an enhancedscenario assuming a 75% take-up among the newly eligible or Medicaid, and 40% among thoseeligible or Medicaid but unenrolled. 3

Low and moderate income uninsured are expected to make up the vast majority o thosenewly gaining coverage under re orm. Assuming the Kaiser enhanced take-up rateprojections, as many as 440,000 individuals who were Medicaid eligible, but unenrolled priorto re orm, will sign up. Among the 90,000 New Yorkers made newly eligible or Medicaid, upto 70,000 are projected to enroll. Among those moderate income uninsured who will be newlyeligible or subsidies to purchase insurance through the new State exchange, approximately

Coverage

2 Insurance eligibili y es ima es base on original analysis by Mana Heal h Solu ions. See table 1 an ppen ix for me ho ology.3 Holahan, John an Irene Hea en. Me icai overage an Spen ing in Heal h eform: a ional an S a e-by-S a e esul s for ul s a or Belo

133% FPL. kaiser ommission on Me icai an he ninsure . May 2010. vailable a : h p:// . ff.org/heal hreform/uploa /Me icai - overage-an -Spen ing-in-Heal h- eform- a ional-an -S a e-By-S a e- esul s-for- ul s-a -or-Belo -133-FPL.p f.


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Coverage (continued)

570,000 are expected to gain coverage. Finally, or the highest income groupthose over

400% o the Federal poverty level who are not eligible or subsidiesan estimated 80,000 arealso expected to purchase coverage and become newly insured.

While ACA is expected to dramatically expand health insurance coverage among New Yorkers,between 1.4 and 1.8 million New Yorkers could remain uninsured. I outreach and enrollmente orts all short, many o the 1.1 million people who are currently eligible but not enrolledin Medicaid could still not enroll. Because ACA does not extend coverage to undocumentedimmigrants, an estimated 400,000 undocumented and uninsured immigrants may be le tbehind. In addition, 200,000 New Yorkers are expected to quali y or a ordability waivers romthe responsibility to purchase coverage; another 190,000 people may choose to pay a penaltyrather than enroll in coverage.

Federal health re orm presents a tremendous opportunity to dramatically shrink the States

uninsured population. Up to 1.2 million New Yorkers could gain coverage; a scale o expansionthat is unprecedented. The ultimate impact o ACA on the number o uninsured in New York,however, will rest in large measure on how Federal health re orm is implemented. Federalhealth re orm opens up a world o new possibilities or New York State; turning its promise intoreality rests on e ective implementation by all stakeholders.

Ab 1. How Will Federal Health Care eform Affect Coverage in New York tate?

C N YNIN D

p C N AF C N Y

NIN DN W Y IN D

p - F M ANMAININ NIN

p - F M A

Eligible or Medicaid but Unenrolled 1,100,000 42% 110,000440,000 660,0001,00

Newly eligible or Medicaid(Childless Adults 100133% FPL) 90,000 3% 50,00070,000 20,00040,

Access to Exchange Eligible orSubsidies (0400% FPL) 700,000 27% 570,000 130,000

Access to Exchange Ineligible orMedicaid or Subsidies (>400% FPL) 340,000 13% 80,000 260,000

A ordability Exemption Takers 200,000

Penalty Payers 60,000

Undocumented Immigrants 390,000 15% 0 390,000A 2,620,000 100% 810,0001,160,000 1,460,0001,820,000

See ppen ix for table Me ho ology


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P BLI P ISI S

Medicaid and the Childrens Health Insurance Program (CHIP) serve as a oundation or enhancinghealth insurance coverage under Federal health re orm. Most signifcantly, ACA establishesa new national minimum Medicaid fnancial eligibility level or many individuals under the ageo 65, extends authority and unding or CHIP, and calls or streamlined eligibility and enrollmentprocedures or both Medicaid 4 and CHIP. Because New York is one o only fve states that alreadyo ers coverage to childless adults and expanded coverage to parents under Medicaid, onlya small subset o New Yorkersroughly 90,000 childless adults between 100 and 133% o theFederal Poverty Level (FPL)will become newly eligible or Medicaid as a result o the Federalexpansion. However, enhanced Federal unding or those childless adults who are already eligible

or Medicaid will bring signifcant new Federal resources to the State, and streamlined eligibilityrules are likely to make it easier or eligible New Yorkers to get and keep their coverage.

Implications of ACA for New Yorks Partnership PlanIn 2009, e Yor submi e a aiver amen men o he en ers for Me icare & Me icaiServices ( MS) o implemen S a e legisla ion:

ransi ioning Me icai income eligibili y o a gross income es ; increasing eligibili y levels for pregnan omen an infan s o 230% of he Fe eral

Pover y Level (FPL); aligning eligibili y for chil ren in Me icai an heir paren s in Family Heal h Plus o

160% FPL; an increasing FHPlus eligibili y levels for paren s an chil less a ul s o 200% FPL, pen ing

MS approval of 100% Fe eral fun ing for he expansion.

wi h he passage of heal h care reform, e Yor an MS eferre iscussion of he

propose FHPlus expansion pen ing gui ance regar ing Me icai eligibili y levels,he s an ar for calcula ing income, an he ne Basic Heal h Program op ion. the BasicHeal h Program, as escribe belo , is an al erna ive o enrollmen in he heal h insuranceexchange for non-Me icai eligible in ivi uals up o 200% FPL.

Medicaid x ansion ( 2001 5)Medicaid currently provides health coverage or more than 4.5 million New Yorkers. 6 New YorkMedicaid covers children under fve up to 133% FPL, children aged six to 18 up to 100% FPL,pregnant women and in ants up to 200% FPL, parents and young adults up to 83% FPL, andchildless adults up to approximately 78% FPL. Elderly and disabled New Yorkers may in somecases receive coverage at slightly higher eligibility levels, as do children and adults participatingin waiver programs, designed to meet their special health needs in a community-based, cost-e ective manner. Finally, New Yorkers with incomes too high to quali y or traditional Medicaid

4 kaiser ommission on Me icai an he ninsure . where are he S a es to ay? Me icai an S a e-Fun e overage ligibili y Levels forLo -Income ul s. december 2009. vailable a : h p:// inyurl.com/23pfob .

5 ll ci a ions are o sec ions of he ffor able are c ( ), unless o her ise no e .6 e Yor S a e depar men of Heal h. umber of Me icai Bene ciaries by a egory of ligibili y an Social Service dis ric . Sep ember 2009.

vailable a : h p:// .heal h.s a e.ny.us/nys oh/me s a /el2009/2009-09_enrollees.xls.


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may be eligible to participate in Family Health Plus (FHPlus), a Medicaid- unded program that

provides a somewhat more limited beneft package to parents and young adults (ages 1920)with incomes up to 150% FPL and childless adults with incomes up to 100% FPL. Children withincomes above Medicaid thresholds are eligible or CHPlus, New Yorks CHIP program that o erscoverage on a sliding scale basis with subsidies up to 400% FPL.

Ab 2. Current New York tate Income ligi ility evels 7

I IbI I Y p C N M DICAID INC M V(N INC M ANDA D)C N FHp CHp INC M V

( INC M ANDA D)

Parents Approx. 83% FPL

150% FPLPregnant Women

100% FPL(full coverage)

200% FPL(prenatal and maternity coverage)

Childless Adults Approx. 78% FPL 100% FPL

19 and 20 year olds Approx. 83% FPL 150% FPL

Children < 1 200% FPL No limit; subsidies < 400% FPL

Children, ages 15 133% FPL No limit; subsidies < 400% FPL

Children, ages 618 100% FPL No limit; subsidies < 400% FPL

Once ully implemented, the Federal Medicaid expansion is likely to result in a signifcant increasein the number o New Yorkers receiving Medicaid. As many as 70,000 new Medicaid enrolleeswill come into the program as a result o the increase in the eligibility level or childlessadults rom 100% to 133% FPL; a reduction in churning on and o o Medicaid will increaseenrollment among currently eligible but uninsured individuals by as much as 440,000enrolleesre erred to as the woodwork or welcome mat e ect.

Coverage for Individuals with Income at or below 133% of the Federal poverty evel ( 2001(a)).E ective 2014, Federal health care re orm establishes a new national Medicaid eligibilitythreshold or most individuals under age 65, providing coverage or those who have income levelsup to 133% FPL. 8 In New York, these minimum income eligibility levels will result in new Medicaideligibility or approximately 90,000 New Yorkers who are childless adults between 100% and 133%FPL. In addition, or children aged six to 18 and parents with incomes between 100% and 133%FPL, this change appears to require a shi t in eligibility rom CHPlus to Medicaid and rom FHPlusto Medicaid, respectively.

New York will have to determine how the State will meet coverage needs or populationscurrently covered under its Medicaid waiver, The Partnership Plan, at income levels that exceedthe new Federal Medicaid standard, including pregnant women up to 200% FPL and parentsand young adults up to 150% FPL. The ACA allows New York to continue providing coverage orindividuals over 133% FPL and receive its standard Federal Medical Assistance Percentage

7 In he 2009-2010 s a e bu ge , he Legisla ure enac e s a u e o change Me icai eligibili y o a gross income s an ar , increase Me icai eligibili yo 230% FPL for infan s an pregnan omen, an increase FHPlus eligibili y o 160% FPL for paren s, hus aligning coverage an eligibili ye ermina ion rules for paren s heir chil ren. e Yor never implemen e hese changes (see call ou box on page 2 regar ing e Yor s

Par nership Plan.) this able re ec s eligibili y levels an s an ar s ha are curren ly opera ional in e Yor .8 ffec ive 2014, also requires s a es o provi e coverage o curren an former fos er chil ren up o age 26.


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(FMAP or the Federal share o a states Medicaid costs). New Yorks standard FMAP rate is 50%.

Specifcally, the law creates a new optional Medicaid eligibility group that would allow coverageo non-elderly individuals with incomes above 133% FPL starting in 2014, provided that higherincome individuals cannot be covered be ore lower income individuals nor parents enroll inMedicaid coverage while their children remain uninsured. The ACA makes urther con ormingamendments that have the e ect o providing Federal unding at the standard FMAP level

or coverage o this population. 9 The States additional options or covering these populationsin 2014 include: (i) transitioning them to the exchange, and (ii) creating a Basic Health Program

or these and other consumers with incomes rom 133200% FPL (see Section C, below, ora discussion o the Basic Health Program).

Medicaid benchmark bene ts Must Consist of At east Minimum ssential Coverage ( 2001 (c)).Under the ACA, New York must provide the newly expanded population, including childlessadults, parents and children in the expansion group, with a benchmark beneft packageconsistent with the Federal defnition o benchmark in statute. 10 The law states thatbenchmark benefts may be less generous than the benefts available or individuals currentlyeligible or Medicaid coverage, but must be at least as generous as the narrower essentialhealth benefts o ered by private health insurance plans in the new State Health InsuranceExchange (hereina ter, the exchange) to be established under ACA by 2014 (discussedon page 20 o this report). Signifcantly, the defnition o benchmark includes our options,including an option or Secretary-approved coverage. 11 Thus, it may be possible or New Yorkto secure Department o Health and Human Services (HHS) approval or a benchmark packagethat is consistent with benefts New York now provides under FHPlus or Medicaid. The lawalso requires that mental health services, prescription drugs and amily planning services andsupplies be included as part o the benchmark beneft. 12 A comparison o essential benefts

with current Medicaid, FHPlus, and CHPlus benefts is provided in the ollowing table.The ACA also provides or a higher FMAP or certain expansion populations in New York.However, FMAP enhancements will only apply or benefciaries receiving the benchmarkbeneft package approved by the Secretary. For children with incomes rom 100133% FPLwho become newly Medicaid eligible in 2014, New York must ensure access to the ull rangeo Early and Periodic Screening, Diagnostic, and Treatment program (EPSDT) beneftsguaranteed under Medicaid, which may require the wraparound benefts to supplement thebenchmark package or children. 13

9 2001(e)(2)( ) an (B).10 Benchmar bene s are e ne in Fe eral Me icai la as being bene s comparable o hose offere hrough insurance provi e o s a e or

Fe eral employees, insurance provi e by he larges priva e HM in he S a e, he ac uarial equivalen of hese op ions, or a plan approve byFe eral Me icai of cials. Social Securi y c ((SS ) Sec. 1937. [42 .S. . 1396u-7]).11 Social Securi y c 1937(b)(1)(d) [42 .S. . 1396u-7(b)(1)(d)].12 2001(c), 2303(c).13 requires ha he en ire expansion popula ion, inclu ing chil ren, receive benchmar bene s. Ho ever, he Social Securi y c speci es

ha chil ren receiving benchmar bene s are s ill en i le o he full range of Me icai bene s guaran ee o chil ren un er he arlyan Perio ic Screening, diagnosis, an trea men program ( PSdt). See Social Securi y c 1937 [42 .S. . 1396u-7] an S a e Me icaidirec ors Le er #06806810-005, 6044 of he de ci e uc ion c of 2005, March 31, 2006, an S a e Me icai direc ors Le er #10-005, e p ion for overing In ivi uals n er Me icai , pril 9, 2010.


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(See urther discussion o essential health benefts on page 23, State Health Insurance

Exchanges.)Federal Funding for Cost of Covering Newly ligi le Individuals ( 2001(a)(3)). Under ACA, New Yorkwill receive enhanced Federal unding or childless adults in Medicaid. The law provides ordi erent FMAP enhancement methodologies or states that will be newly covering childlessadults and parents between state wel are levels and 133% FPL, and Expansion States, likeNew York, that have already extended coverage to parents and childless adults above 100% FPL.Specifcally, ACA creates an Expansion State FMAP ormula which begins in 2014 and graduallyreduces New Yorks state share o Medicaid costs or non-pregnant, childless adults under age 65up to 100% FPL; enhanced Federal unding begins in 2014 and reaches 90% in 2020 and beyond.Signifcantly, this FMAP enhancement reduces New Yorks obligation to und 50% o Medicaidcosts or 940,000 childless adults 14 currently in the Medicaid and FHPlus programs and any new

benefciaries with incomes under 100% FPL who come into the program. Ultimately, New Yorkwill be responsible or just 10% o the Medicaid o this population.

For non-pregnant childless adults in New York with incomes rom 100% to 133% FPL who willbecome newly eligible or Medicaid in 2014, New York will receive a separate, enhanced FMAPrate starting at 100% in 2014 and going down to 90% in 2020 and beyond. New York will continueto receive a 50% FMAP or children, parents and benefciaries who are disabled or over 65. 15

Ab 4. FMAp for Currently ligi le and Newly ligi le Childless Adults

Y A

pAN I N FMAp F AD A ADYI Ib ND NY M DICAID

NHANC M N FMAp F N W YI Ib AD ND ACA

CHI D AD p 100% Fp CHI D AD F M 100%133% Fp

S a e Share Fe eral Share S a e Share Fe eral Share2014 25% 75% 0% 100%

2015 20% 80% 0% 100%

2016 15% 85% 0% 100%

2017 10% 90% 5% 95%

2018 5% 95% 6% 94%

2019 7% 93% 7% 93%

2020+ 10% 90% 10% 90%

Source: Mana Heal h Solu ions analysis of he .

New York has the option to expand eligibility prior to 2014, but will receive its existing base

match rate o 50% until 2014.16

14 da a compile by e Yor S a e depar men of Heal h. June 2010.15 the merican ecovery an einves men c of 2009 (Public La 111-5), also no n as he Fe eral s imulus pac age, enhance e Yor s

FM P o approxima ely 62% hrough december 31, 2010.16 the increase FM P ha e Yor has been receiving un er he merican ecovery an einves men c of 2009 oul no be available if

he S a e elec s o implemen he Me icai expansion before 2014. S a e Me icai direc ors Le er (SMdL) #10-005 e p ion for overingIn ivi uals n er Me icai , pril 9, 2010.


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ACA Medicaid Drug Rebate Program (MDRP) Provisions

the Md P as crea e by he Fe eral mnibus Bu ge econcilia ion c of 1990 ( B90)17 o ensure ha s a es receive prescrip ion rug iscoun s similar o hose manufac-

urers provi e priva e purchasers. 18, 19 ffec ive January 1, 2010, increases he Me -icai reba e un er he Md P: (i) for mos bran rugs from minimum of 15.1% o 23.1%of verage Manufac urer Price ( MP); an (ii) for generic rugs from 11% o 13% of MP.

nli e curren Me icai reba es, he incremen al savings associa e i h he increase ohe minimum reba e percen age ill o solely o he Fe eral governmen an ill no be

share i h he s a es.20 e Yor S a e has his orically maximize supplemen al reba eagreemen s i h manufac urers, hich he S a e has share i h he Fe eral govern-men . I is unclear ho he increase o he minimum reba e percen age in ill affec

he S a es supplemen al reba e agreemen s. Speci cally, i is unclear he her he neminimum ill come close o or excee curren supplemen s, an he her manufac urers

ill agree o ne supplemen al reba e agreemen s over he ne minimum reba e pricepoin . If he ne minimum has he effec of re ucing or elimina ing e Yor s supple-men al reba e arrangemen s, he S a e s an s o lose an es ima e $100 million annually

ha curren ly o s o i s Me icai program.21 e Yor also has signi can implemen a-ion as s rela e o he ne rug reba e provisions in inclu ing, a a minimum, major

sys em mo i ca ions o ensure accura e reba e invoicing an reconcilia ion.

Federal Funding ortunities for New York tate. The ACA provides several small and largeopportunities or the State to substitute Federal Medicaid dollars or State dollars and therebyproduce State savings. As noted above, under the ACA, New York will receive a higher FMAP

or the cost o covering childless adults. Today, New York provides Medicaid coverage at a 50%Federal matching rate to almost 1 million childless adults with incomes below 100% FPL. From2014 to 2020, the Federal matching rate or these benefciaries will increase rom 75% to 90%,and New York will be able to save a commensurate amount in State spending. New York willsave additional monies in 2015 when the Federal matching rate or CHPlus is increased by23 percentage points rom 65% to 88% (see discussion o ACA CHIP provisions on page 17).In addition, the State may secure additional enhanced FMAP by adopting certain changes to itsMedicaid program including adopting health homes, expanding community-based long-termcare, and providing certain preventive care services.

17 Pub. L. o. 101-508, 4401, 104 S a . 1388, 1388143-161 (co i e a 42 .S. . 1396r-8 (2000)) .18 S a e Me icai programs o no purchase rugs irec ly; hey reimburse pharmacies for covere rugs ispense o Me icai bene ciaries. ach

s a e e nes i s pharmacy reimbursemen formulas, hich inclu e he rug ingre ien cos plus a ispensing fee.19 the Me icai drug eba e Program as amen e by he e erans Heal h are c of 1992 ( H ). n er H , rug manufac urers are

require o en er a pricing agreemen i h HHS for he 340B drug Pricing Program, hich is a minis ere by he Heal h esources an Servicesminis ra ion. In a i ion, H requires rug manufac urers o en er in o various pricing agreemen s i h he depar men of e erans ffairs.

20 Public La s 111-148&111-152: 2501. See also in y Mann, direc or, en er for Me icai , HIP, an Survey & er i ca ion. S a e Me icaidirec or Le er #10-0006. pril 22, 2010.

21 e Yor S a e depar men of Heal h es ima e prepare by i s pharmacy bene manager, Magellan Me icai Services.


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A ter 2014, New York will also have the opportunity to reduce or eliminate support or current

insurance options that may not be needed a ter implementation o Federal re orm. Forexample, the State may create a Basic Health Program to cover pregnant women, parents andeventually children with incomes over the new 133% FPL threshold, up to 200% FPL. New Yorkmay likewise revisit State subsidies or Healthy New York, as well as the individual market.

The oregoing discussion highlights areas where New York may decrease State spending under theACA. These savings will be o set to some degree by the administrative costs required to implementFederal re orm, and the cost o covering a large in ux o new Medicaid enrollees rom the 90,000childless adults with incomes between 100% and 133% FPL eligible or Medicaid or the frst time,as well as rom among the 1.1 million who are eligible or Medicaid but not enrolled.

A IMp M N A I N: CHA 1.Medicaid x ansion

MMA Y

ACA sets a new, national Medicaid threshold at 133% FPL. Newly eligible enrollees willreceive a benchmark beneft package that must be approved by CMS and include atleast the essential benefts required in the exchange. The benchmark beneft may be lessgenerous than Medicaid. The law will provide new coverage in New York or childlessadults between 100133% FPL.

FF C IV DA January 1, 2014

F D AF NDIN

New York will receive enhanced Federal unding or childless adults in Medicaid. For childlessadults up to 100% FPL, ACA reduces New Yorks state share gradually beginning in 2014. Fornewly eligible adults (100133 FPL), the State will receive an enhanced FMAP rate o 100%in 2014 that gradually declines. The two rates merge over time; New York will receive a 90%FMAP or its entire childless adult populations in 2020 and beyond.

p N IbpA I

CMS will issue guidance with respect to the expansion in Medicaid.

New York State Department o Health will be responsible or implementing the expansion.

New Yorks Legislature will enact con orming legislation aligning New Yorks Medicaideligibility levels with new Federal parameters.

AIMp M N A I N

A /I

asks

Amend State Plan and/or Waiver as needed.

Implement changes to the application and enrollment processes or Medicaid and CHPlus.

Implement eligibility systems changes necessary to e ectuate the expansion, includingprogramming new eligibility categories that enable New York to accurately claimenhanced FMAP or childless adults.

Implement the eligibility systems design or changes necessary to achieve connectivitywith the State exchange.

Obtain CMS approval or a benchmark beneft package.

Seek changes to State law related to Medicaid, CHPlus, and FHPlus eligibility levels asrequired by ACA.

Transition certain children in CHPlus and adults in FHPlus to Medicaid in 2014.

continued on next page


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A IMp M N A I N: CHA 1.Medicaid x ansion

AIMp M N A I N

A /I(C N IN D)

IssuesHow will parents and young adults with incomes between 133% FPL and 150% FPL whoare currently covered in Family Health Plus secure coverage? Will the State maintainthe FHPlus program or these individual s? Will it create a Basic Health Program?

How will documented and undocumented pregnant women with incomes between 133% and200% FPL who are currently covered in Medicaid secure coverage? Will New York maintainthese pregnant women in the Medicaid program? Will these women be transitioned intoa Basic Health Program or the exchange? What are the implications o pregnant womenenrolling in the exchange or the States ability to enroll eligible newborns in Medicaid?

What will New Yorks benchmark package be? Current Medicaid beneft? FHPlus? Other?

Will long-term care be par t o the benchmark package? I not, what are the implicationso the benchmark or disabled Medicaid benefciaries above current standard Medicaidincome eligibility levels?

Changes in Medicaid ligi ility and nrollment ulesIn 2014, Federal re orm requires states to change their Medicaid and CHIP eligibility rulesin three undamental ways or the majority o enrollees: 1) states must change the way incomeis counted or the purposes o determining eligibility; 2) states must eliminate the asset test

or target populations; and 3) states must make a series o changes intended to improve theprocess or determining and maintaining eligibility within their public programs.

Income Counting ules e laced y Modi ed Adjusted ross Income ( 2002). ACA requires NewYork to change the way it calculates income or the purposes o determining Medicaid and CHPluseligibility or the majority o enrollees with the goal o creating a single set o eligibility rulesthat will apply nationally to Medicaid, CHIP, and the exchange. Today, Medicaid and CHIP allow

applicants to deduct certain childcare expenses, child support payments, the frst $90 o earnedincome and other deductions at the States discretion be ore determining eligibility. 22 In addition,certain other income is not counted or is disregarded in Medicaid. While these income ruleshave the e ect o increasing eligibility standards or many amilies, they also make the applicationprocess more complex. Federal re orm simplifes such income-counting rules by aligning themwith a single Federal standard articulated in Federal tax law called the modifed adjusted grossincome (MAGI).23 In order to help o set the impact o the changes in these income rules, thenew methodology modifes the adjusted gross income by allowing an across the board 5% incomedisregard or all applicants. Thus, the expanded eligibility under Medicaid, in e ect, is automaticallyincreased rom 133% FPL to 138% FPL. Income will not be calculated on a MAGI basis or allindividuals. Individuals who are elderly, disabled, medically needy, or deemed eligible or Medicaidas a result o other programs will not be subject to the MAGI eligibility standard.

limination of the Asset est ( 2002). The ACA also requires that, beginning in 2014, stateseliminate Medicaid asset tests or the same adults impacted by MAGI. Because neither theexchange nor CHIP has an asset test, this ensures alignment across programs. Similar tothe application o MAGI, this change does not apply to Medicaid recipients who are elderly,

22 SS Sec. 1931.23 In ernal evenue o e of 1986 36B( )(2), as amen e by 1401 an H 1004(a)(2).


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disabled, medically needy, or deemed eligible or Medicaid as a result o other programs such

as Temporary Assistance or Needy Families (TANF). New York does not currently have an assettest or the MAGI populations; however, it has in the past, and reinstatement o the asset test hasbeen the subject o recent proposals by members o the Legislature. Under ACA, such proposalscould not become law without risking New Yorks Federal Medicaid and CHPlus unding.

nrollment im li cation ( 1413, 2201). ACA includes additional provisions aimed at simplyingeligibility and enrollment procedures or Medicaid and CHIP or the non-elderly and disabled, andensuring coordination with coverage available through newly created state exchanges. Ultimately,the enrollment processes or individuals eligible or subsidies, whether under Medicaid, CHPlusor through the exchange, must be seamless. By January 1, 2014, New York must implementa series o procedures that provide or simplifed enrollment in Medicaid and CHPlus andcoordination with the exchange, or risk losing Federal unding or these programs. Requiredenrollment simplifcation and coordination procedures include:

utilizing a single, streamlined application orm or Medicaid, CHPlus, and subsidies orcoverage through the exchange or other State programs;

establishing a website that permits individuals to apply to, enroll in, and renew enrollmentin Medicaid, and consent to enrollment or re-enrollment in such coverage throughelectronic signature.

Enrollment Technology Standards and Protocols ( 1561)

By Sep ember 23, 2010, in consul a ion i h he Fe eral HIt Policy ommi ee an he HItS an ar s ommi ee, HHS mus evelop in eroperable an secure s an ar s an pro ocols hafacili a e enrollmen an rene al in Fe eral an s a e programs. these s an ar s an pro o-

cols mus allo for: lec ronic ma ching agains exis ing Fe eral an s a e a a. Simpli ca ion an submission of elec ronic ocumen a ion, igi iza ion of ocumen s, an

sys ems veri ca ion of eligibili y. euse of s ore eligibili y informa ion (inclu ing ocumen a ion) o assis i h re en ion

of eligible in ivi uals. apabili y for in ivi uals o apply, recer ify an manage heir eligibili y informa ion online,

inclu ing a home, a poin s of service, an o her communi y-base loca ions. bili y o expan he enrollmen sys em o in egra e ne programs, rules, an func ionali ies

o opera e a increase volume. o i ca ion of eligibili y, recer i ca ion, an o her communica ions abou eligibili y via e-mail

an cell phone. her func ionali ies necessar y o provi e eligibles i h s reamline enrollmen process.

Fun ing is available o s a e an local governmen s for he evelopmen an a ap a ion of sys-ems o hese ne s an ar s an pro ocols. speci es ha s a e an local governmen s

mus submi applica ions ou lining a plan o a op an implemen appropria e enrollmen ech-nology o secure fun ing, bu oes no provi e fur her e ails on he applica ion process, fun -ing levels, any ma ching requiremen s, or iming. Presumably his informa ion ill accompanyfur her Fe eral gui ance an a fun ing announcemen rela e o he provision.


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A IMp M N A I N: CHA 2.Changes in Medicaid ligi ility ules

(C N IN D)

AIMp M N A I N

A /I

asks

Work with CMS to develop guidance with respect to MAGI, and align new requirementsand existing Medicaid rules.

Identi y existing eligibility categories impacted by MAGI.

Submit to HHS the procedures that will be used to calculate income and income eligibilityor Medicaid and CHPlus under MAGI.

Ensure that children do not lose coverage as a result o the transition to MAGI.

Develop new standard application or enrollment in public health insurance programsand the exchange.

Develop website through which consumers can enroll and renew health insurance cover-age in public insurance programs and the exchange.

Develop and upgrade systems in rastructure to implement MAGI, integrate Medicaid andCHPlus eligibility and enrollment with the exchange, and e ectuate data matching withFederal systems.

Issues

How will New York manage and und systems changes that will require signifcanthuman and fnancial resources to implement?

How will New York coordinate the enrollment and eligibility rules, procedures,and systems or MAGI and Non-MAGI (Aged, Blind and Disabled) populations?Does ACA e ectively create two separate Medicaid programs in New York?

How will Medicaids point in time and countable income requirements mesh withthe new MAGI standard?

Does New Yorks planned Enrollment Center play a role in public program eligibilitydeterminations and their coordination with the exchange?

What role will counties play in eligibility and enrollment?

Will some individuals lose coverage under MAGI and, i so, how will they be transitionedto the exchange or other coverage?

How will other state subsidized programs be integrated into eligibility and enrollmentsimplifcation planning (EPIC, ADAP, COBRA, FHPlus EBI, premium assistance, etc.)?

Maintenance of ffort ( 2001(gg) and 2101( )The ACA imposes a maintenance o e ort (MOE) requirement prohibiting states rom imposingeligibility rules and enrollment methodologies or procedures in their state Medicaid and CHIP

programs that are more restrictive than the eligibility and enrollment requirements in place onMarch 23, 2010, the date ACA was signed into law. The MOE requirement continues or adultsuntil 2014, when HHS certifes that the state exchange is ully operational and states are boundonly by the new Medicaid threshold. For children covered by Medicaid and CHPlus, the MOEcontinues until October 1, 2019, a ter which time states may transition children to the exchange,but only upon a fnding by the Secretary that comparable pediatric coverage is provided by


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participating qualifed health plans. New York would risk Federal support or both the Medicaidand CHPlus programs or any violations o MOE. ACA does not appear to prohibit states romseeking savings by reducing provider payments or restricting optional benefts in Medicaid.

A IMp M N A I N: CHA 3.Maintenance of ffort

MMA Y The State must maintain eligibility rules in Medicaid and CHPlus that are no more restrictivethan rules in place on March 23, 2010.

FF C IV DA For Adults: March 23, 2010 through the HHS certifcation o a ully operational state exchange.For Children: March 23, 2010 through October 1, 2019.

p N IbpA I

CMS is expected to issue MOE guidance in the next several months.

The New York State Department o Health will monitor and ensure compliance with MOE.

A

IMp M N A I NA /I

asks

Monitor and comply with MOE to ensure that New York receives ull Federal undingor its Medicaid and CHPlus programs.

Changes to the Childrens Health Insurance program (CHIp) ( 2101, 2102, 10203(c),10203(d), HC A25 1004( )(2))CHPlus provides coverage or 390,000 children with amily incomes above Medicaid eligibilitylevels. 26 New York uses Federal CHIP and State unding to ully und coverage or childrenwith amily incomes up to 160% FPL, and to subsidize coverage or children with amilyincomes between 160% and 400% FPL. The State receives a Federal matching rate o 65% orits CHPlus program expenses.

Families with incomes over 400% FPL can buy-in to CHPlus by paying the ull premium(on average, $175 per child per month). CHPlus covers any child who is a resident oNew York State regardless o citizenship or immigration status.

Ab 5. New York tate CHpluspremium u sidiesINC M V p CHI D p MI M FAMI Y p MI M CAp


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Federal health care re orm e ectuates new eligibility parameters or CHPlus, reauthorizesFederal CHIP unding, enhances the States FMAP or the program, and imposes a CHPlusmaintenance o e ort (MOE) requirement. In short, ACA unds CHPlus through 2015 andrequires New York to maintain its current CHPlus program, except that in 2014, children withincomes between 100% and 133% FPL will transition to Medicaid and receive the benchmarkbeneft plus ull EPSDT services. A ter 2015, New Yorks matching rate will increase to 88%and New York will be subject to the MOE requirement until 2019. Congressional action willbe required to continue CHIP unding beyond 2015, when new Federal unds are no longeravailable. The CHPlus MOE requirement ends in 2019 and CHPlus children will transition intothe exchange or into a Basic Health Program (i New York determines to establish one).

Ab 6. Current ligi ility evels for CHplusN W Y A CHp p AM C N I IbI I Y V

Children < age 1 > 200% FPL

Children age 15 > 133% FPL

Children age 618 > 100% FPL

ransition of Children from CHplus to Medicaid ( 2001[a]). With the implementation o the newFederal Medicaid eligibility threshold in 2014, roughly 89,000 children with amily incomes

rom 100%133% FPL who are currently covered by CHPlus will become eligible or the StatesMedicaid program. 27 The law appears to require New York to transition these children to theMedicaid program. 28

Federal Funding for CHplus ( 2101[a], 10203). ACA extends Federal CHIP unding through

September 30, 2015. A ter 2015, the uture o the CHPlus program is uncertain; while stateswill be operating under a mandate to maintain CHPlus eligibility levels through 2019, thismandate is un unded by the Federal government a ter 2015. In the event that states exhaustavailable Federal CHIP unds, the law requires that children enrolled in CHIP be transitionedto Medicaid coverage, i eligible, or into exchange coverage. The law also enhances the CHIPFMAP beginning October 1, 2015 through September 30, 2019 by increasing the Federal shareo CHPlus expenses by 23 percentage points, rom a 65% to an 88% match in New York. ACArequires that in the event o Federal unding short alls at any point between 2014 and 2019,the State have procedures in place to transition CHPlus eligible children to alternate sourceso coverageeither Medicaid or the exchange. Specifcally, New York would be required to havechildrens coverage available through a qualifed plan in the exchange that is comparable toCHPlus in terms o both benefts and cost-sharing requirements. The HHS Secretary would

have to certi y that childrens coverage comparability through the exchange.


27 da a es ima e provi e by he e Yor S a e depar men of Heal h.28 Sec ion 2001(a)(1) an 2001(a)(4) (crea ing ne Social Securi y c Sec ion 1902( )(3)).


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A IMp M N A I N: CHA 4.nhanced Federal u ort for CHIp

MMA YACA e ectuates new eligibility parameters in CHPlus related to the Medicaid expansion,authorizes two additional years o CHIP unding, enhances FMAP or the CHPlus program,and establishes an MOE requirement that the State has to meet to keep its FederalMedicaid and CHIP unding.

FF C IVDA ( )

March 23, 2010 through September 30, 2019: CHIP MOE.

September 30, 2015: Federal CHIP unding authorization end date.

October 1, 2015: Federal matching or CHPlus is enhanced to 88%.

October 1, 2015: State permitted to enroll CHPlus children who are citizens orlegal immigrants in comparable coverage through the exchange.

By April 1, 2015: Secretary shall review and certi y exchange coverage or children toensure that benefts and cost-sharing are comparable to State CHIP benefts.

p N IbpA I

CMS will issue guidance on the CHIP MOE requirement.

Congress will determine CHIP unding reauthorization beyond 2015.

The New York State Department o Health will be responsible or meeting MOE,e ectuating coverage transitions, and ensuring (i necessary) that CHPlus comparablecoverage is available through the exchange until 2019.

The Legislature will enact statute to change CHPlus eligibility levels consistentwith the new Medicaid threshold and to e ectuate other changes to CHPlus consistentwith ACA implementation.

AIMp M N A I N

A /I

asks

Meet MOE requirement.

Transition children at 100133% FPL rom CHPlus to Medicaid.

Issues

With a unctioning exchange in 2014, should New York continue to o er a CHPlus buy-in option to amilies with incomes over 400% FPL? Would MOE precludeNew York rom eliminating this option or amilies?

I Federal CHIP unding is eliminated a ter 2015, how will New York ensure availabilityo CHPlus benefts to children through 2019?

Will the State maintain its CHPlus program a ter 2019 i a ully unctioning exchange and/or a Basic Health Program are available to consumers?

I CHPlus is eliminated in 2015 or 2019, how will New York provide coverage to allimmigrant children going orward?



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St t H LtH I S X H S ( 1311, 1312, 1313, 1321,1322, 1323, 1324)ACA mandates that New York establish by January 1, 2014 an American Health BeneftExchange (exchange), a marketplace through which individuals and employers may purchasehealth insurance coverage. Individuals qualifed to obtain coverage through the exchangeinclude citizens and legal immigrants who are not incarcerated and do not have access toa ordable employer coverage. Small businesses (defned as having up to 100 employees)can obtain coverage or their employees through the exchange. Prior to 2016, states have theoption to limit exchanges to businesses with up to 50 employees. Beginning in 2017, stateshave the option to allow businesses with more than 100 employees to purchase coverage ortheir employees through the exchange. The exchange will serve as a portal or individualsand employers who are directly seeking health insurance, or or agents or brokers who mayact on their behal . To in orm the development o Federal regulations around the exchange,

on July 29, 2010, HHS issued a request or comments rom states, consumer advocates,employers, insurers, and other interested stakeholders regarding various actors critical tothe establishment and operation o the exchange. 29

tructure and es onsi ilities of the xchangeThe State will be responsible or establishing exchange(s) that organize the health insurancemarket(s) within New York State. Specifcally, New York must establish (i) at least one healthinsurance exchange or individuals who want to enroll in a qualifed health plan and a separateSmall Business Health Options Program (SHOP exchange) or small businesses; or (ii) implementa single exchange that can serve the needs o both individual purchasers and small groups.I the State chooses to merge its individual and Small Group exchange(s), it will have to meet

orthcoming HHS standards demonstrating its ability to meet the needs o both the Individual

and Small Group markets in a single exchange.

Small Business Tax Credits ( 1421)

Small business are eligible o apply for ne ax cre i s o offse heir premium cos s in 2010 ifhey subsi ize, on a uniform basis, a leas 50% of he cos of heal h insurance coverage. Small

businesses are e ne as hose employers i h fe er han 25 employees an average agesun er $50,000. the cre i ill be available for up o a o-year perio s ar ing in 2010.

the ax cre i is pai in full for employers i h 10 or fe er full- ime equivalen employees( i h average ages of $25,000) an phases ou as employer size an average age increases.Be een 2010 an 2013, he full cre i ill cover 35% of a companys premium con ribu ion.Beginning in 2014, he full cre i ill cover 50% of ha con ribu ion.

tax-exemp organiza ions ill qualify for he cre i , al hough hey are lo er25% hrough 2013an 35% s ar ing in 2014.


29 II -9989- on public isplay a he Fe eral egis er on July 29, 2010.


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Exchanges must be managed by a state governmental agency or a nonproft established bythe state and there are numerous models that New York may consider or establishment o itsexchange, including: a government agency, an independent nonproft, a public authority, or apublic-private partnership. In 2011, Federal grants will be made available to states to establishthe exchanges. The State is obligated to demonstrate an implementation plan or establishingthe exchange(s) by January 1, 2013. I New York ails to establish an exchange by January 1,2014, the Federal government will set up and run a State exchange, either directly or throughan agreement with a nonproft entity.

States have the option o setting up regional exchanges, provided each exchange servesa distinct geographic region. In considering whether to establish regional or statewideexchange(s), the State will need to evaluate regional di erences in population, insurance rating,geography, health care delivery system, employer market, and insurance market.

As part o organizing the health insurance market within the State, the exchange will certi y orparticipation qualifed health plans based on certifcation criteria established by HHS. ACAappears to provide states with certain exibility to determine whether the exchange(s) will bestructured as a clearinghouse model, in which all plans that meet certifcation requirementsare able to obtain qualifed health plan status, or an active purchaser model that certifesa limited number o health plans or participation in the exchange. 30

Except or grand athered plans, all health plans participating in an exchange must operatea single-risk pool or enrollees inside o and outside o the exchange. That is, all o a healthplans enrollees in either the Individual or Small Group market must be treated as a single-riskpool regardless o whether the enrollment occurred within the exchange or not. The ACA alsoallows the State, at its option, to merge the Individual and Small Group markets into a single-risk pool. Such proposals have been advanced in New York previously as a means to stabilizingthe Direct Pay market in the State. 31

The State exchange will establish a navigator program to increase awareness about theexchange and the health insurance subsides newly available to consumers through ACA.The State exchange will urther be responsible or: (i) determining eligibility or consumersubsidies; (ii) the certifcation process or noti ying the Department o Treasury that a consumeris exempt rom the individual mandate and/or the penalty; and, (iii) providing the employeridentifcation in ormation i an employer penalty needs to be applied.

On January 1, 2015, all exchanges are required to be sel -sustaining. Thus, the State will alsolikely consider administrative economies o scale in developing the exchange(s), includingwhether certain exchange unctions should be centralized and/or outsourced. ACA providesauthority or the exchange to outsource administrative unctions, including outsourcing eligibilitydeterminations or qualifed health plan enrollment, tax credits, and cost-sharing reductions tothe State Medicaid agency. The law also allows exchange(s) to charge assessments or user eesto participating insurance issuers or to provide other means o generating revenue.


30 1311.31 ni e Hospi al Fun Issue Brief Merging he Mar e s: ombining e Yor s In ivi ual an Small roup Mar e s in o ommon is Pools, 2008.


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Ab 7. xchange Functions

p ANC IFICA I N

& p b ICDI C

Certi y health plans as qualifed health plans based on Federal requirements.

Require o plans and make public disclosure o the ollowing in ormation in plainlanguage: claims payment policies and prac tices; periodic fnancial disclosures; dataon enrollment, denied claims, and rating prac tices; in ormation on cost-sharing andpayments or out-o -network coverage; and enrollee and par ticipant rights.

Consider premium levels in determining whether to make a plan available throughthe exchange.

ACH,N M N

ANDMp I N

Establish a navigator program to provide public education and outreach designed topromote awareness o the availability o qualifed health plans, the premium tax creditsand cost-sharing reductions, and to acilitate enrollment in qualifed health plans.

Certi y citizenship or immigration status o individuals applying or coverage

through the exchange.Screen individuals to determine i they quali y or premium tax credits or or coverageunder Medicaid or Child Health Plus and i so, enroll them in the appropriate program.

Certi y i an individual is exempt rom the individual mandate or the penalty and providea list o individuals with such cer tifcation to the Secretary o the Treasury, including theemployer in ormation when an employer penalty needs to be applied.

Require that qualifed plans meet marketing requirements and not use marketingpractices or beneft designs that discourage enrollment by high-risk individuals.

Ensure su fcient choice o providers and provide in ormation to enrollees andprospective enrollees on the availability o in-network and out-o -network providers.

Ensure that plans include in the network those essential community providers, whereavailable, that serve predominately low-income, medically underserved individuals. 32

C Mpp

Maintain an internet website where enrollees and prospective enrollees can obtainstandardized in ormation about the plans.

Operate a toll- ree telephone hotline to respond to requests or assistance.

Establish and make available by electronic means a calculator to determine the actual costo coverage a ter accounting or the premium subsidy and the cost-sharing reduction.

Q A I YM A

Assign a rating to each qualifed plan o ered through the exchange based on criteriaestablished by the Secretary.

Require plans to implement a quality improvement strategy that uses a payment structurethat provides increased reimbursement or other incentives to hospitals and health careproviders that improve health outcomes through quality reporting, case management, carecoordination, chronic disease management, and care and medication compliance initiatives,including use o a medical home model.


32 ssen ial communi y provi ers are hose such as heal h care provi ers e ne in 340B(a)(4) of he Public Heal h Service c an provi ersescribe in 1927(c)(1)(d)(i)(I ) of he Social Securi y c as se for h by 221 of Public La 111 8 an inclu e FQH s, dSH hospi als, an

special y clinics receiving esigna e Fe eral fun s, such as hose provi ing family planning services an HI rea men .


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ssential bene ts package ( 1302)Coverage in state exchanges must be o ered by qualifed health plans that provide a ederallymandated essential benefts package. ACA outlines a basic defnition o essential healthbenefts and requires the Secretary o HHS to urther defne the essential benefts package. Todetermine the scope o the essential health benefts coverage, the HHS Secretary must ensurethe coverage is equal to the typical coverage provided by an employer, and according to otherprinciples laid out in the Act. Qualifed plans are not allowed to design benefts that discriminateagainst individuals based on age, disability, or expected length o li e.

The ACA allows states to require that qualifed health plans o er benefts in addition to theessential health benefts defned by the HHS Secretary. However, the state is responsible orde raying the cost o any additional required benefts by making a payment to either: (i) theindividual purchasing coverage, or (ii) the qualifed health plan in which such individual is enrolled.

This provision o ACA has particular relevance in New York, where Insurance Law currentlyrequires all insurers and health plans operating in the State to provide certain mandatedbenefts. These mandated benefts vary by type o insurer or plan: group commercial, individualcommercial, group HMO, insurers, and individual Direct Pay HMO contracts. A comparison o NewYorks mandated benefts with ACA essential benefts, provided in the Table below, suggests thatcertain New York mandatesincluding home care, durable medical equipment, and chiropracticcaredo not appear to be essential health benefts as defned in Federal re orm statute (seeshaded area o table). For those services that are not essential health benefts pursuant tostatute and HHS guidance, New York will have to consider: (i) eliminating its beneft mandates oninsurers and plans in the exchange; (ii) maintaining all or some o the States mandated benefts,but using State dollars to pay or them; or (iii) requiring qualifed health plans to o er mandatedbenefts as supplemental or rider coverage to the essential packages as an option or exchange

purchasers. The HHS Secretary will release urther guidance on the essential health benefts,clari ying the extent to which New Yorks beneft mandates exceed essential benefts.



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Ab 8. New York tate Mandated bene ts Com ared to ACA ssential bene ts(C N IN D)

PEDIATRIC SERVICES,INCLUDING ORAL AND

VISION CARE

u ism spec rum u ism spec rum well chil care

Home heal h care Home heal h care Home heal h care

Me ical con i ions lea ingo infer ili y

Me ical con i ionslea ing o infer ili y

Hospice care

S ille nursing facili y care

hiroprac ic care hiroprac ic care mbulance services

xperimen al servicesrecommen e byex ernal revie agen

xperimen al servicesrecommen e byex ernal revie agen

Priva e u y nursing

durable me ical equipmen

Infer ili y coverage xperimen al servicesrecommen e byex ernal revie agena ing isor ers

a ing isor ersSource: Man a e an Ma e vailable Bene s for ommercial, HM & r icle 43 Insurance on rac s: h p:// .ins.s a e.ny.us/heal h/lbenall.p f.

cci en an Heal h Pro uc hec lis s an u lines: h p:// .ins.s a e.ny.us/a&hpoc .h m.

Exchange beneft levels are based on comprehensiveness o benefts and consumer cost-sharingor a typical or standard population. The ACA imposes a limit on out-o -pocket costs, such as

co-payments and deductibles, o $5,950 or individuals and $11,900 or amilies purchasingcoverage through the exchange. 33 For those with modest incomes, premium tax credits and ur-ther reductions in cost-sharing levels will be made available (discussed below). The ACA estab-lishes our categories or essential benefts levelsBronze (minimum coverage), Silver, Gold,and Platinumthat cover the same set o services but range in the value o benefts covered.

FI 1. Health Coverage through the xchange: ssential bene ts package

REQUIRED SERVICES:

AC A IA VA p I N F H A H CAC C V D bY p AN F A ANDA D

YpICA p p A I N

p A IN M

D

I V

b Nz

mbula ory pa ien services90%

mergency services80%

Hospi aliza ion70%

Ma erni y an ne born care60%

Men al heal h an subs ance use isor er services, inclu ingbehavioral heal h rea men

Prescrip ion rugs

ehabili a ive an habili a ive services an evices

Labora ory servicesPreven ive an ellness services an chronic isease managemen

Pe ia ric services, inclu ing oral an vision care

Limi s on ou -of-poc e cos s for all ca egories of essen ial bene levels(levels fur her re uce for in ivi uals i h incomes be een 100% an400% FPL enrolle in a Silver ier plan)

In ivi ual s: $5,950 Families: $11,900

33 u -of-poc e limi s are aligne i h Fe eral high- e uc ible plan ou -of-poc e spen ing limi s, hich are re-in exe annually.the gures expresse are 2010 levels.


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Quali ying insurers must o er at least one plan at the Silver and one plan at the Gold level ineach exchange where their plans are o ered. Quali ying plans must o er a child-only policy orany o the our categories o benefts it o ers.

Quali ying plans may o er catastrophic coverage that does not meet one o the our levels ocoverage, but only to enrollees aged 30 or under and those who would otherwise be exempt

rom the requirement to purchase coverage because the lowest cost premium exceeds 8% otheir income. These plans would o er less coverage at a lower premium, as set by the HSAcurrent law levels. Prevention benefts and coverage or three primary care visits would beexempt rom the deductible.

u sidies ( 1401, 1402, 1411, 1412)Beginning in 2014, the insurance exchange(s) will administer a subsidy program includingpremium tax credits and cost-sharing assistance. Re undable and advanceable premiumtax credits will be based on a comparison o (i) a taxpayers monthly household income asa percentage o the Federal poverty level to (ii) the monthly premium or the second lowestcost plan within the Silver tier. Individuals with incomes up to 400% FPL will receive a taxcredit or a percentage o the cost o premiums or coverage under a qualifed health plan.Premium tax credits are scaled by amily income so that premiums are less than 2% o income

or consumers with incomes up to 133% FPL while households with incomes 300400% FPLwould not pay more than 9.5% o income or health insurance. The ACA also provides that lowerincome people have their out-o -pocket spending capped at lower levels i they choose a Silverlevel plan, which has the e ect o increasing the actuarial value o their health plan (i.e., theplan pays a higher proportion o the cost o benefts).

In New York, there has been considerable concern among State o fcials, consumeradvocates, and other stakeholders that the national standard subsidies prescribed by theACA will be insu fcient to allow consumers to purchase coverage. Consumers in NewYork and other high cost-o -living states have less disposable income to purchase healthinsurance coverage, perhaps even subsidized coverage. Recognizing the variation in cost-o -living among states, the ACA requires the Secretary o HHS to conduct a study to examinethe easibility o adjusting FPL levels or the purposes o determining subsidies and cost-sharing or di erent geographic areas. 34 The law states that i HHS determines that anadjustment is easible, the study should include a methodology to make such an adjustment.The Secretary is required to submit a report to Congress by January 1, 2013.

34 1416, as a e by 10105(f).


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Ab 9. ACA premium u sidy evels (Income evel premium as a percent of Income)Up to 133% FPL 2% o income133150% FPL 34% o income150200% FPL 46.3% o income200250% FPL 6.38.05% o income250300% FPL 8.059.5% o income300400% FPL 9.5% o income

Source: kaiser Family Foun a ion, xplaining Heal h are eform: Ques ions bou Heal h Insurance Subsi ies, pril 2010. h p:// . ff.org/heal hreform/7962.cfm.

In general, subsidies will not be available to people with access to health coverage through anemployer. I an employer health plan does not have an actuarial value o at least 60%meaningthat the plan covers at least 60% o the cost o covered benefts in the aggregate or a standard

populationor i an employees share o the employer premium exceeds 9.5% o income, theemployee may enroll in a plan in the exchange and be eligible or premium and cost-sharingsubsidies. Employers o ering minimum essential coverage will be required to provide reechoice vouchers to employees with incomes less than 400% FPL and whose contribution orthe employer coverage exceeds 8%, but does not exceed 9.8% o their income, which they canuse to enroll in an exchange.

Ab 10. ACA Cost- haring eductions for ower-Income FamiliesINC M V D C I N IN - F-p C C F A I V I p AN

100%200% FPL 2/3 o the maximum

200%300% FPL 1/2 o the maximum

300%400% FPL 1/3 o the maximumSource: kaiser Family Foun a ion, xplaining Heal h are eform: Ques ions bou Heal h Insurance Subsi ies, pril 2010. h p:// . ff.org/heal hreform/7962.cfm.

The exchange must establish, and make available by electronic means, a calculator todetermine the actual cost o coverage a ter any premium tax credit and cost-sharing reductionsare applied. The tool will help purchasers understand the actual costs o obtaining healthinsurance inside the exchange.

Although there is a presumption that the advanced determination o subsidies and the otherenrollment-related processes described above will be per ormed by the exchange, ACAprovides the State with the exibility to operate the enrollment and eligibility determination

program as part o its Medicaid program.

The State must operate the exchange as part o a coordinated system with other state healthsubsidy programs. Thus, individuals must be able to apply or enrollment and receive adetermination o eligibility to participate (or continue to participate) in premium tax credits andcost-sharing reductions within the exchange, the State Medicaid program, CHPlus and the BasicHealth Program, should the State develop one.


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Quali ed Health plans ( 1301)

HHS will develop a regulation that addresses the requirements that an exchange will usein certi ying a health plan as a qualifed health plan. ACA requires that at a minimumthe qualifed plans o ered inside the exchange:

O er essential beneft packages with cost-sharing levels and actuarial values consistentwith ACA requirements.

Meet marketing requirements and not use marketing practices or beneft designs thatdiscourage enrollment by high-risk individuals.

Ensure su fcient choice o providers and provide in ormation to enrollees and prospectiveenrollees on the availability o in-network and out-o -network providers.

Include in the network those essential community providers, where available, that serve

predominately low-income, medically underserved individuals. 35 Be accredited with respect to local per ormance on clinical quality measures, patientexperience ratings, and other accreditation program requirements.

Implement a quality improvement strategy, which uses a payment structure that providesincreased reimbursement or other incentives to hospitals and health care providers thatimprove health outcomes through quality reporting, case management, care coordination,chronic disease management and care and medication compliance initiatives, including useo a medical home model.

Use a uni orm enrollment orm developed by the National Association o InsuranceCommissioners (NAIC) and certifed by HHS.

Use standard ormat established or presenting health beneft plan options.

Provide in ormation to enrollees and prospective enrollees and to each exchange in whichthe plan is o ered on any quality measures.

In some states, newly established co-op plans may be a source o qualifed health plans o eredthrough the exchange (see box).

Consumer Operated and Oriented Plans ( 1322)ACA appropriates $6 billion to establish nonproft, member-run health insurance companies through the ConsumerOperated and Oriented Plan (co-op) program, in each state to o er qualifed health plans or Individual and SmallGroup markets. Co-ops are consumer-governed organizations that provide insurance and deliver health services.

Advisory Board: In June 2010, the Comptroller General o the U.S. established an Advisory Board with 15 appointed mem-bers. The HHS Secretary is required to award loans and grants or the nonproft plans based on Board recommendationsno later than July 1, 2013. ACA directs the Secretary to give pre erence in awards to applicants that will o er a qualifedplan on a statewide basis, will utilize integrated care models, and have private support. The grants will be available tonew co-ops. ACA also directs the Secretary to ensure that there is unding to establish at least one co-op per state.

35 ssen ial communi y provi ers are hose such as heal h care provi ers e ne in 340B(a)(4) of he Public Heal h Service c an provi ersescribe in 1927(c)(1)(d)(i)(I ) of he Social Securi y c as se for h by 221 of Public La 111 8.


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A IMp M N A I N: CHA 5.Health Insurance xchange

MMA Y

Creates state-based exchanges to assist individuals and small businesses in obtaininghealth insurance. The exchanges must be run by a governmental agency or a nonproft entityestablished by a state. Coverage in the exchanges must be o ered by qualifed health plans,private plans that must provide a set o ederally mandated services called an essentialbenefts package with our beneft levels. Out-o -pocket costs are capped and or those withmodest incomes, premium tax credits, and reductions in cost-sharing levels will be available.

FF C IVDA

eptember 30, 2010: Initial Exchange Planning and Establishment grants o up to$1 million are anticipated to be awarded. Planning grants may be renewed;grant unding ends January 1, 2015.

July 1, 2013: States have an option to orm interstate compacts to acilitate the purchaseo health insurance e ective July 1, 2013.

January 1, 2013. States must demonstrate to the Secretary that they have taken actionsnecessary to implement the exchange(s) by January 1, 2014.

January 1, 2014: Exchanges must be operational. I a state ails to have an operationalexchange by January 1, 2014, the Federal government, through HHS, will establish anexchange in that state.

January 1, 2015: Date by which each exchange is required to be sel -sustaining(assessments and user ees on insurance issuers are permitted).

January 1, 2017: States have an option to allow businesses with more than 100 employeesto purchase coverage in the SHOP exchange(s).

F D AF NDIN

Exchange Planning and Establishment grant unding in amounts to be determined byHHS is available to help states establish exchanges within one year o enactment anduntil January 1, 2015. HHS recently issued a unding opportunity announcement to makeavailable an initial installment o up to $1 million to each state. 36

p N IbpA I

HHS is responsible or launching a consumer Web portal, issuing grants to support undexchanges and, establishing the Federal requirements or state exchanges.

The New York State Insurance Department and the New York State Department oHealth are responsible or planning and implementing the exchanges, including cra tingcon orming regulations required to operate the exchanges.

The New York State Legislature will enact any legislation required to operate an exchangeconsistent with, but not limited to, the Federal requirements.

AIMp M N A I N

A /I

asks

Respond to unding opportunity announcement to help plan and establish the exchanges.

Determine structure and governance o exchange and model ororganizing the insurance market.

Defne risk-adjustment mechanisms.

Establish rating areas and a rating ramework.

Conduct inventory o existing IT/systems, identi y requirements or establishingthe exchanges, and develop the required in rastructure.

continued on next page

36 S a e Planning an s ablishmen ran s for he ffor able are c s xchanges, a alog of Fe eral domes ic ssis ance ( dF ) umber 93.525.


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A IMp M N A I N: CHA 5.Health Insurance xchange

(C N IN D)

AIMp M N A I N

A /I

asks

Apply mental health parity provisions to qualifed health plans.

Develop provider network standards.

Establish marketing standards.

Develop premium subsidy mechanism.

Plan billing procedures and responsibilities (exchange vs. insurer)

Build eligibility determination process, including assessment o income, access toemployer-sponsored insurance, and citizenship status.

Establish co-op structure.

Demonstrate implementation readiness to HHS.Issues

How much additional capital will the State need to develop and launch the exchange andhow will it be unded?

Will New Yorks exchange be part o State government agency, an independent nonproftorganization, a public authority, or a public/private partnership?

Will New York establish one exchange? Independent exchanges or individuals and smallbusinesses? Regional exchanges in New Yor

Implementing Federal Health Care Reform: A Roadmap for New York State

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