New York Pushes Toward Universal Health Care

Encounters Major Federal Resistance

October 1, 2007

Author: Trilby de Jung

Although many of us have grown weary waiting for meaningful progress toward national health care reform, innovative state initiatives are ongoing.  Governor Eliot Spitzer clearly intends to move New York into the forefront of the state movement toward universal coverage.  New York State has recently responded to federal roadblocks to expansion of public insurance for children by organizing a coalition of states to take the Centers for Medicare and Medicaid Services (CMS) to court.

The Spitzer Administration’s Building Block Approach to Universal Coverage

The Administration’s movement toward universal coverage is based on a building block approach that seeks to expand existing programs and reform existing delivery systems.  Governor Spitzer maintains a commitment to gathering public input along the way.  This fall the Commissioners of Health and Insurance announced a series of public hearings across New York State, dubbed “Partnership for Coverage” hearings.  The idea is to gather input from citizens on the development of proposals for universal coverage.  For a copy of the hearing notice and schedule of upcoming hearings, visit: http://partnership4coverage.ny.gov/hearings/

Last year’s budget included significant reforms designed to strengthen Medicaid, Family Health Plus and Child Health Plus, including enrollment simplification to help reach eligible but uninsured low-income families, expansion of Family Health Plus to allow employers to participate, and eligibility expansion of Child Health Plus to 400% of the federal poverty level.  Governor Spitzer points to these legislative achievements as key building blocks in his effort to increase access to coverage and we can expect to see additional reforms in the Governor’s executive budget for 2008.

However, the State Department of Health is still awaiting a response from CMS on some of the legislative reforms that require federal approval.  Last month, New York received word that CMS formally disapproved the planned expansion to its Child Health Plus program.

CMS Shuts Down State Expansion of Child Health Plus

In August, CMS issued a new directive for the State Children’s Health Insurance Program (SCHIP) that has the effect of barring states from covering children with family incomes above 250% of the federal poverty level (FPL), or about $42,925 a year for a family of three.  Under the new directive, states cannot cover children with family incomes above 250% of FPL unless they meet enrollment participation rates for lower income children that no state has yet met (95%); make certain assurances regarding the availability of employer-based coverage; impose waiting periods of at least one year; and impose cost-sharing levels within one percentage point of that required of families under private insurance.

The new CMS policy constitutes a reversal of previous policy and interferes significantly with the authority that has long rested with the states to determine eligibility levels and to expand programs in order to reduce the number of children who lack health insurance.  Yet the directive comes without any rule-making activity or other provisions for notice and comment, and it comes without any new statutory authority.  The directive also comes in the midst of Congressional debate over the SCHIP program and is inconsistent with the approach taken by both the Senate and the House.

Not long after the directive was issued.  Congress approved compromise legislation on SCHIP that specifically acknowledges the harsh and over-reaching nature of the August directive and ameliorates its effects significantly.  However, in October, President Bush vetoed the compromise legislation.

Meanwhile, New York received official notice in September that, based on the August directive, CMS had officially disapproved New York’s planned expansion of its Child Health Plus program.  In response, New York formed a coalition with several other states and filed a federal complaint in the Southern District of New York.  New York’s suit alleges that CMS violated the Administrative Procedures Act and exceeded its statutory authority by imposing the new barriers to state expansion of SCHIP that are reflected in its August guidance.

What does this mean to low-income families in New York?

Many families in New York had expected to benefit significantly from New York’s expansion of Child Health Plus.  According to the Children’s Defense Fund, two hundred and fifty newly eligible families had completed applications with facilitated enrollers.  In addition, many families currently enrolled in Child Health Plus at the full premium level would have benefited from significant reductions in their monthly bills, and in fact received bills for September reflecting the new lower premiums.  These families are now being asked to repay the difference in the full premium amount and the lower levels reflected in their original bill for September.  Many of the children in these families have significant health needs that continue to stress fragile family budgets.

The Empire Justice Center has been working with the Community Service Society in New York City and two national advocacy groups, the National Health Law Program and the Center for Medicare Advocacy, to put together a lawsuit on behalf of low-income families in New York that would have benefited from the planned expansion of Child Health Plus.

We plan to file a companion suit to New York State’s case in the Southern District, unless Congress is able to reach a speedy and appropriate compromise that can withstand a presidential veto.

If you know families that might want to participate, or have questions about the case, contact Trilby de Jung (1-585-454-6500, X2955) or Bryan Hetherington (1-585-454-4060, X5809).