New York: Woo-hoo! Essential Plan expansion to ~100K more people to go into effect April 1st!

Mon, 03/04/2024 - 2:56pm

New York's implementation of the ACA's Basic Health Plan provision (Section 1331 of the law) is called the Essential Plan. It currently serves 1.2 million New Yorkers, or over 4x as many residents as ACA exchange plans do.

Whenever I write about BHPs I always throw in a simple explainer about what it is, with an assist from Louise Norris:

Under the ACA, most states have expanded Medicaid to people with income up to 138 percent of the poverty level. But people with incomes very close to the Medicaid eligibility cutoff frequently experience changes in income that result in switching from Medicaid to ACA’s qualified health plans (QHPs) and back. This “churning” creates fluctuating healthcare costs and premiums, and increased administrative work for the insureds, the QHP carriers and Medicaid programs.

The out-of-pocket differences between Medicaid and QHPs are significant, even for people with incomes just above the Medicaid eligibility threshold who qualify for cost-sharing subsidies.

The Basic Health Program (BHP) – section 1331 of the ACA — was envisioned as a solution, although most states did not establish a BHP. Under the ACA (aka Obamacare), states have the option to create a Basic Health Program for people with incomes a little above the upper limit for Medicaid eligibility, and for legal immigrants who aren’t eligible for Medicaid because of the five-year waiting period.

In short, if you earn up to 138% FPL, you enroll in Medicaid; from 138 - 200% FPL, you enroll in a Basic Health Plan policy (BHP); at 200% FPL or higher, you enroll in a Qualified Health Plan policy (QHP).

Federal funding for BHP programs is supposed to be equal to 95% of the total amount of advance premium tax credits (APTC) and cost sharing reduction (CSR) assistance that the enrollees would otherwise have been eligible for had they otherwsie enrolled in a QHP using the ACA exchange.

Of course, the state itself can also throw in additional funding to make the BHP plans more generous if they wish...which is a key point to keep in mind. The coverage has to be at least as affordable and at least as good as a benchmark silver plan with Cost-sharing reduction benefits applied.

As I wrote about several times last year, New York has been hoping to expand the population eligible for the Essential Plan up the income scale:

The New York State Department of Health today announced it has submitted a proposal to the federal government to expand the Essential Plan, a public health insurance program offered through NY State of Health, the state’s official health plan Marketplace.  The application for a final Section 1332 State Innovation Waiver, which was submitted to the U.S. Departments of Health and Human Services and Treasury, requests that eligibility for the Essential Plan be extended to New Yorkers with incomes between 200 and 250 percent of the Federal Poverty Level (FPL). Presently, eligibility is limited to New Yorkers with incomes up to 200 percent of the FPL who are ineligible for Medicaid.

The Essential Plan currently covers over one million New Yorkers.  It provides comprehensive benefits with no deductible and minimal cost sharing, for those who qualify. If the waiver application is approved, nearly 100,000 additional New Yorkers are expected to gain access to the Essential Plan.

Unfortunately, the Section 1332 Waiver required to put this expansion into effect was delayed last fall due to some concerns about the financial & risk pool impact.

Fortunately, it looks like it's full steam ahead now:

On March 1, 2024, the U.S. Department of Health and Human Services (HHS) and U.S. Department of Treasury approved New York's Section 1332 State Innovation Waiver application to expand the Essential Plan. Section 1332 State Innovation Waivers allow states to pursue innovative strategies for providing residents with access to high quality, affordable health insurance. The waiver was approved for five years, from 2024 through 2028.

...Key Components of the Waiver

This approved State Innovation waiver expands health insurance and covers health-related social needs, improving health care and advancing health equity. The waiver includes the following key components:

Extending Affordable Health Insurance to Over 100,000 New Yorkers – The Essential Plan will be expanded to New Yorkers with incomes between 200 and 250 percent of the FPL, making the high quality, affordable program available to over 100,000 additional New Yorkers.

Social Determinants of Health Grants – Complementing New York’s recently approved Medicaid Demonstration waiver, this approved Essential Plan State Innovation waiver seeks to address social determinants of health through grants in the following focus areas:

Food insecurity, including medically tailored meals, food pharmacies, and personalized coaching

Preparing for climate change by providing enrollees with persistent asthma with an air conditioner to protect their health, reduce the number of Emergency Department visits, and help communities prepare for extreme weather

Knowledge sharing, including provider training on mental health services and social determinants of health

Behavioral Health Grants – This waiver seeks to improve behavioral health for Essential Plan enrollees through grants to insurers support improved access to behavioral health services, including mobile crisis units, crisis diversion centers, and crisis respite centers

Promoting Individual Market Premium Stability – Federal funding from this waiver will also support an Insurer Reimbursement Implementation Plan established to mitigate premium increases for individual market enrollees from the impact of the population with estimated household income 200-250% of FPL moving to the Essential Plan. In addition to maintaining stable premiums in the individual market, this waiver will also support stability with respect to plan participation for the individual market.

I don't know much about the social determinants or behavioral health grant aspects, but the short version is that New Yorkers who earn between 200 - 250% FPL will now be eligible for the Essential Plan starting next month, which should be a much better value for the vast majority of them than even heavily subsidized ACA plans.

The "Insurer Reimbursement" program is interesting. Around 28,000 of the 214,000 New Yorkers who enrolled in ACA exchange plans during the 2023 Open Enrollment Period (13.2%) earned 200 - 250% FPL. 2024 OEP enrollment is up around 35% overall, so it'd likely be around 38,000 today. The "Reimbursement Plan" is to reduce the impact of those ~38K enrollees shifting over to the Essential Plan instead...something which you never hear about happening when a state like North Carolina newly expands Medicaid to their 100 - 138% FPL enrollees, I should note. Huh.

In any event, this is a good thing.

As for the April 1st start date, that's noted here:

The Essential Plan eligibility expansion will take effect April 1, 2024. In May of 2023, New York submitted a 1332 State Innovation Waiver application to expand the Essential Plan (EP) to New Yorkers with incomes up to 250% of the Federal Poverty Level to the U.S. Departments of Health and Human Services and Treasury. Through this expansion of Essential Plan coverage, the State seeks to increase access to high quality, affordable health insurance for low-and moderate-income individuals.

...Since the original submission, New York has made additional updates to the application in response to public comments and federal review.

First, the application was updated to eliminate the proposed $15 monthly member premium for the EP expansion group.

Second, New York added the Insurer Reimbursement Implementation Plan (IRIP) to alleviate premium increases in the Qualified Health Plan (QHP) market resulting from this waiver.

Third, New York added Deferred Action for Childhood Arrivals (DACA) recipients as part of the proposed Essential Plan expansion.

The waiver also requested that EP members have the choice to remain in EP when they become pregnant rather than moving to Medicaid.

It is expected that nearly 100,000 New Yorkers will enroll in EP as a result of this waiver, including over 20,000 individuals who were previously uninsured and over 70,000 individuals who will move from QHP coverage to EP, with an average annual savings of $4,700.

Some of these are a big deal, especially the DACA inclusion (around 28,000 DACA recipients live in New York, though I don't know how many earn less than 250% FPL). The 70K estimate of those moving from exchange coverage to EP coverage is nearly twice as many as I had estimated above, which is interesting.

There's also some other interesting tidbits about the details:

March 2, 2024: NYSOH will send updated eligibility and enrollment notices to the population that will be transitioned from QHP (200-250% of FPL) to the new “EP 200-250” variant. These members will be defaulted into their QHP issuer’s EP 200-250 product when available, but all members will have the option to pick a different EP Issuer, or to stay in their QHP, but at the full premium cost. Members whose QHP issuer does not have an EP 200-250 product in the appropriate service area will be auto-assigned into a plan if they do not choose one in 10 days, consistent with Medicaid Managed Care auto-assignment rules. The auto assignment job is run daily.

I can't imagine too many people will willingly stick with a QHP at full price rather than an EP plan for basically nothing, but I suppose there could be a handful of people who absolutely need to keep a particular doctor or clinic in their network?

March 5, 2024: “EP 200-250” plans will be live in the NYSOH system.

March 16, 2024: 834 enrollment transactions will be sent to Issuers to terminate QHP coverage for the population with incomes of 200-250% of FPL effective 3/31/24, and add the “EP 200-250” coverage with a 4/1/24 enrollment effective date.

April 4, 2024: Implementation of EP Pregnancy Choice Provision-- Individuals who are currently in EP (both Aliessa and non-Aliessa) and who report being pregnant will remain EP eligible, instead of being moved into Medicaid. Eligible pregnant EP members can call Customer Service if they would like to move to Medicaid.

Starting August 1, 2024, EP eligibility will be extended to individuals 19-64 with DACA status and incomes up to 250% of the Federal Poverty Level (FPL). To implement this change, New York will move all existing DACA Medicaid enrollees and any new income-eligible applicants into EP assuming they meet the other criteria for the program.

Under the law’s eligibility standards, applicants will qualify for coverage if they reside in New York, are under sixty-five, do not have other minimum essential coverage, and meet the income requirements. The DACA population includes an estimated 12,000 individuals currently enrolled in Medicaid and another 2,500 individuals with incomes above Medicaid levels and up to 250% FPL.