Health Care Reform: What it Means for NY’s Children and Families

Kinda Serafi, Esq.

Children’s Defense Fund-New York 15 Maiden Lane, Suite 1200New York, New York 10038

(212) 697-2323kserafi@cdfny.org

Main Components

What does health care reform mean for:

Those who have health insurance now• Insurance Reform Provisions (2010)

Those who do not have insurance• Strengthening of public health insurance programs

Medicaid expansion (2014) Child Health Plus protected (at least until 2015)

• Creation of Exchange (2014) Marketplace to purchase coverage for those who do not have

employer coverage and are not eligible for public coverage

How Health Care Reform Affects Coverage of New Yorkers

Currently Uninsured

Newly Insured Post-Reform (estimates)

Eligible for Medicaid now

1.1 million 440,000

Newly eligible for Medicaid

90,000 70,000

Access to Exchange

1.04 million 650,000

TOTAL 2.62 million 1.16 million

Table modified from NYS Health Foundation report: Implementing Federal Health Care Reform: A Roadmap for New York State

Insurance Reform Provisions

Insurance Reform:Ban on Annual or Lifetime Limits

• The law bans “lifetime limits” (Sept 2010) or “annual limits”(2014) on the amount of medical coverage an insurer will pay.

• This happens when medical expenses go over a certain amount and the insurer informs individual that they are not covered anymore.

Insurance Reform:

Preventive Care

No cost-sharing for preventive care

Effective Sept 2010 for new plans and 2014 for all plans

Includes immunizations and mammograms

Insurance Reform:

Coverage for Young Adults

• As of September 23, 2010 young adults up to 26 years of age can stay on or join their parents’ health insurance plan at group rates.

• In New York State we can continue to buy slightly more expensive (COBRA-like) coverage for dependents up to 29. Law will continue until September 2010. After September 2010, coverage available for

dependents between the ages of 26 and 29.

Who? Young adults up to age 26 If parents have employer-sponsored or private

market insurance (plan must offer family coverage) Does not matter whether individual is married,

financially independent, student, state residence

When? September 23, 2010 and thereafter During plan’s next open enrollment OR special

enrollment period

Cost? Premiums and packages same for all 5-year-old child costs the same as 25-year-old Estimated 1% hike in premiums by 2013 (OMB)

Insurance Reform: Coverage for Young Adults

Insurance Reform:

Pre-Existing Conditions

Insurers will not be allowed to refuse to pay for bills just because an individual has a health condition that may cost more money. NY has always prevented insurers from doing this but

insurance companies found a way to drop people while they were in coverage.

Children (September 2010) Adults (2014)

States will have plans for individuals with pre-existing medical conditions from 2010-2014

NY Bridge Plan

Insurance Reform:

New York Bridge PlanWho? Individuals with pre-existing medical conditions

Must have been uninsured for at least 6 months prior No family or dependent coverage

When? Can apply as of August 20, 2010; coverage: October, 2010 Until 2014, when insurers are no longer allowed to deny

coverage to adults for pre-existing conditions.

Cost? $362 Upstate; $421 Downstate Minimal copays (Office visit: $20; emergency room: $100;

preventive care: No copay)

Demonstration ProjectsHealth Homes for Chronically Ill • Effective January 2011, New York State may elect to reimburse

providers who chronically ill patients select as their “health home” to improve coordination of care.

Medicaid Community First Option• Effective October 2011, New York State will have the option to allow

Medicaid recipients with incomes up to150 percent of the federal poverty level (less than $33,000 a year for a family of four), and who require institutional level of care, to remain in their homes and communities.

Pediatric Accountable Care Organizations• From 2012 to 2016, pediatric providers may be recognized as

pediatric Accountable Care Organizations (ACOs) if they demonstrate a coordinated delivery system. The incentive payments offered to Pediatric ACOs will hopefully encourage more providers to offer a higher standard of care while achieving cost savings.

Strengthening of Public Programs

Strengthening of Public Programs:

Medicaid Expansion

Medicaid will be expanded to 133 percent of the federal poverty level (2014)

Modified Adjusted Gross Income Will be a big boon for single and childless couples

who were not previously eligible Some children will move from CHP to Medicaid Some adults will move from FHP to Medicaid

Strengthening of Public Programs:

Child Health Plus Protected• All uninsured children remain eligible for

Child Health Plus. • State may not make changes to eligibility

levels or cost-sharing.

Future of the program:• Child Health Plus program preserved up until

2019. • Funding preserved up until 2015.

Strengthening of Public Programs:

Family Health Plus

For individuals with incomes between 133% and 200% State may create a “Basic Health Plan”

Uncertain whether Family Health Plus will

become the “Basic Health Plan”

Hospice Care

Public health insurance will cover both

hospice care and treatment.

Retroactive to March 23, 2010, children on Medicaid or Child Health Plus may have coverage for both hospice care and curative treatment.

The Exchange

Finding health insurance with “no wrong door”

The Exchanges will be like “marketplaces” to purchase coverage Insurance companies will be regulated in this exchange

and all products will have to meet standards.

New Exchanges which must be set up in each state by 2014. Some flexibility in what Exchange will look like. For individuals with no employer coverage and who are

not eligible for public coverage Businesses of up to 100 employees will also be able to

buy coverage through the health exchange set up in New York.

The Exchange:

Overview

• Exchanges will have to provide assistance to make sure people can easily navigate. Exchange must be accessible by phone, by internet,

by mail, or in person

• Go through the Exchange regardless of whether you are eligible for Medicaid or private coverage.

• Simple and seamless pathway. One provides limited information and State does third party database verification.

The Exchange:

Accessing The Exchange

The Exchange: Tax Subsidies and Cost Sharing Limits

• There will be tax credits that are available for lower and middle income individuals to help purchase monthly premiums.

• There are monthly premium limits/caps based on income and family size. You’ll be limited to as low as 2% and as high as 9.5% of

your income. • Out of pocket caps for co-payments and

deductibles. The absolute maximum you can pay in one year is roughly

$6000 for individuals and $12,000 for family policies if you enroll in the “silver level” plan.

Income percentage of the federal poverty level

Income Range (family of 3)

Premium as a % of Income

Annual Premiums

Annual Caps on Out of Pocket Costs (% of income family of 3)

Annual Caps on Out of Pocket Costs

Total potential health care costs as a % of income (family of 3)

Total potential health care costs (family of 3)

150% $18,310-$27,460

4.0% $1,099 14.1% $3,867 18.1% $4,966

151-200% $27,461-$36,620

6.3% $2,307 10.6% $3,867 16.9% $6,174

201-300% $36,621-$54,930

9.8% $5,218 10.6% $5,800 20.1% $11,018

300-400% $54,931-$73,240

9.8% $6,958 10.6% $7,733 20.1% $14,691

The Exchange: Tax Subsidies and Cost Sharing Limits

Immigrants

• Immigrants and undocumented children remain eligible for Child Health Plus

• Immigrants and undocumented pregnant women remain eligible for Medicaid

• Immigrants and PRUCOL adults remain eligible for Medicaid

• For the Exchange: Lawfully present immigrants can purchase health insurance

through the exchange, and are eligible for the premium tax credits.

Undocumented immigrants are NOT allowed to purchase private health insurance in the exchanges, even if they are willing to the full cost for it and are not eligible for the premium tax credits.

Individual Mandates

• Required to purchase coverage if you do not have it. (2014)

• You’ll pay a small tax penalty – much lower than many people believe.

• This penalty will be phased in:

There are some exceptions like financial hardship: if you can prove you simply can’t afford health insurance, you don’t have to pay a penalty.

2014 the greater of $95 or 1% of income

2015 the greater of $325 or 1% of income

2016 the greater of $695 or 2.5% of income

Long Road to Implementation

• Need to share with community what health care reform means for themo CDF-NY is developing one-pagers and tool kits and conduct

community trainings

• State needs to start implementing many health insurance reform changes immediately

• State needs to develop Exchange as portal to coverage. Many questions to be answered…

• Assistance to consumers in navigating health care reform