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HCFANY on Federal Health Reform:
The House Leadership Bill (H.R. 3962)—November 6, 2009
Health Care For All New York (HCFANY) is a statewide coalition of over 80 organizations dedicated to winning affordable, comprehensive, high-quality health care for all New York residents through state and federalhealth reform. For more information about HCFANY, please visit to our website and health reform blog at: www.hcfany.org. The following summary describes HCFANY’s position on the House Leadership Bill.
Affordability.
  The House leadership bill has the strongest approach toaffordability of all pending Congressional legislation. New York is a high-coststate, where family coverage costs $24,000 a year on average. Over thispast decade, the price of insurance has risen seven times faster than medianwages. Two-thirds of all bankruptcies are related to medical debt. Facedwith this reality, even New Yorkers with moderate income levels wouldrequire subsidies to buy insurance on their own. The House bill makescoverage more affordable for New York’s working families.
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 The House bill provides sliding-scale subsidies to people earning up to400% of the federal poverty level (FPL), which is $73,240 for a familyof three. Premiums are capped at 1.5% of gross income for lowestincome families, rising to 12% for the highest income folks. Althoughthe House Bill has more progressive subsidies than the Senate bill,some New York families will still struggle to make ends meet. (SeeFamily Budget Chart attached). HCFANY would prefer more generoussubsidies at lower and moderate income levels and the continuation of subsidies to families up to 500% of FPL. Nonetheless, the House billrepresents the best path of the Congressional bills to achievingaffordable quality coverage for all.
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 The House bill limits out-of-pocket expenses so that the likelihood thatNew York families will face bankruptcy when a catastrophic healthevent occurs would be reduced. The bill progressively scales out-of-pocket exposure from $500/$1000 for an individual/family below 150%
Health Care for All New York Campaignc/o Elisabeth Ryden Benjamin, Community Service Society of New York 105 E. 22
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Street, New York, New York 10010(212) 614-5461
 
of FPL to $5,000/$10,000 for an individual/family at or above 400% of FPL.
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 The House bill’s approach to penalizing people who do not or cannotcomply with the mandate to carry insurance coverage is preferable tothe Senate’s. Under the House bill, the penalty is 2.5% of anindividual/family’s adjusted gross income per year. By contrast, theSenate Finance Committee Bill imposes a regressive tax penalty of $750 per adult per year, regardless of income.
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 The House bill forbids people who have employer-sponsored insurancefrom receiving subsidies unless the cost of their coverage exceeds 12%of their income. This requirement could prove to be especiallyburdensome for low-wage workers. HCFANY prefers the SenateFinance Bill, which sets this threshold at 10%.
HCFANY supports the affordability schedule adopted in the Housebill and prefers it to the affordability schedule in the Senate Financebill, but recommends allowing workers with employer-sponsored insurance to obtain subsidies if the cost of their coverage exceeds10% of their gross income.
Medicaid.
 Medicaid is the safety net insurance coverage for the poorand disabled in New York State. The House leadership bill would expandMedicaid coverage to families with incomes up to 150% of FPL, while thecurrent Senate Finance Committee bill would only expand it to 133% of FPL.New York is a “leader state” and already offers Medicaid coverage to familieswith children with incomes up to 150% of FPL and people without children inthe home up to 100% of FPL.
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 The House bill requires the federal government to fully fund the costsof expanding coverage to all up to 150% of FPL for the first two years,and require the States to pay 9% of these costs thereafter. All Stateswould be treated the same.
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 The Senate Finance Committee bill, however, would only provide fullfederal funding for a small portion of New Yorkers (those between 100-133% of FPL without children). It rewards the laggard States who havenot offered generous Medicaid coverage to their residents.
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 The New York State Division of the Budget estimates that the SenateFinance Committee bill will exacerbate New York’s budget crisis and
cost 
New York $900 million, while the House bill would engender Statebudget savings.
HCFANY supports the House Bill’s approach to expandingMedicaid coverage to 150% fairly across all States.
Children’s Health Coverage.
Child Health Plus, New York’s StateChildren’s Health Insurance Program (CHIP) Program, offers comprehensivecoverage with an affordable sliding-fee premium scale for families up to400% of the Federal Poverty Level (FPL). Families above 400% of the FPLcan buy into the program by paying the full premiums (without governmentsubsidy). The House Leadership Bill would eliminate this program, underthe assumption that children will now be able to get coverage throughemployer plans, the Exchange, or Medicaid.
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New York’s Child Health Plus Program has no deductibles and no co-payments. If Child Health Plus is eliminated, costs for children in theExchange will be significantly higher. An average New York family of 4(2 parents, 2 children) never pays more than 3% of their income fortheir children’s coverage under Child Health Plus.
1
Families purchasingchild coverage-only from the Exchange will pay as much as 7% of theirincome
2
. Families purchasing family benefit coverage will pay evenhigher rates.
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(See Table 1 below).
Table 1 – Annual Cost of Coverage for a Family of Four Under Child HealthPlus versus in the Exchange
1
Calculations based on eligibility levels and premium sliding fee scale for Child Health Plus.Premiums are $15, $30, $45 or $60 per month per child depending on family income.
2
Calculations based on cost of average monthly full buy-in premiums of Child Health Plus--$160 per month per child. (varies by county and plan).
3
Based on Section 343 of H.R. 3962.
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