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Protect Family Health Plus in the Budget

March 13, 2013

 

The Executive Budget would eliminate Family Health Plus (FHP), a program that has served as a lifeline for low income workers in New York State for over a decade.  Although the Governor provides “grandfathered” assistance with the costs of Exchange coverage for some individuals already enrolled in Family Health Plus, nearly 77,000 individuals and parents would be left out with this approach.  No new applications would be taken after December 31, 2014, and Family Health Plus would be repealed January 1, 2015. 

We are concerned about the harsh financial consequences for these low income workers.  Family Health Plus provides premium free coverage with very low cost sharing.  Without Family Health Plus, New Yorkers below 150% of the federal poverty level (FPL) and above the income level for Medicaid (138% of FPL) will have no option other than seeking private coverage through the Exchange.  In the Exchange, these low income workers will face premiums of up to $670 annually.  We fear that for many families this will put coverage out of reach. 

The proposal to grandfather in only existing enrollees into FHP means the State will be cutting back on income eligibility for health care coverage for the first time.  It also breaks President Obama’s promise that no one will be worse off under the ACA.

The Assembly Budget includes a proposal to pay the premium costs not just for the grandfathered enrollees in Family Health Plus, but for all parents with incomes over Medicaid eligibility levels and under 150% of FPL.  We support this approach, although we would ask that single adults and childless couples at similar income levels also be included. 

We estimate the total number of persons who would qualify for premium assistance would be approximately 113,000.  Using the maximum premium level of $670 per enrollee, costs would be about $78 million a year or $39 million state share with a 50% federal match.  

New York expects to realize savings of approximately $2.5 billion annually under the ACA.  Given this level of savings, it is only fair to set aside a relatively small amount, $38 million in state dollars, which would leverage the federal match, to make sure that low income workers do not lose coverage.

The Assembly Budget language also authorizes New York State to proceed with establishing a Basic Health Program as soon as federal guidance on this option is available.  We fully support this language as well.  The BHP will provide additional savings for New York and serve as a critical bridge to affordability for low-income individuals and families with income over the Medicaid levels.