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HCFANY on Federal Health Reform:
Senate “Patient Protection and Affordable Health Care Act”December 1, 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 various aspects of the Senate bill,recently introduced by Senate Majority Leader Harry Reid. 
Affordability.
  The affordability provisions of the new Senate bill offer amarked improvement from the former proposal put forth by the SenateFinance Committee. Premium caps have been brought down across theboard, making coverage more affordable for low- and middle-incomefamilies. However, the amount of total spending on health care that familiesare expected to cover remains high – particularly for families earning below200% of the Federal Poverty Level (FPL).
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 The Senate bill provides sliding-scale premium subsidies to peopleearning between 100% and 400% of FPL, which is $73,240 for a familyof three. Premiums are capped at 2% of gross income for lowestincome families, rising to 9.8% for the highest income folks. Althoughthe Senate has more progressive subsidies than the House bill athigher income levels, low-wage New Yorkers earning below 250%would still do better under the House proposal. However, New Yorkfamilies will still struggle to make ends meet under either bill. (SeeFamily Budget Chart attached). HCFANY urges lawmakers to ensuremore generous subsidies at lower income levels and the continuationof subsidies to families up to 500% of FPL.
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 The Senate 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 scales out-of-pocket exposurebased on Internal Revenue Service (IRS) limits for high-deductibleplans ($5,900 for an individual/$11,600 for a family) so that familiesearning between 100%-200% are responsible for a third of this amount($3,867) annually, families earning between 200% -300% FPL areresponsible for one half of this amount ($5,800), families earning
Health Care for All New York Campaignc/o Elisabeth Ryden Benjamin, Community Service Society of New York 105 E. 22
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between 300%-400% would be responsible for two-thirds this amount($7,733). Above 400% FPL, families will be responsible for the fullamount of $11,600.
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 The Senate bill’s approach to penalizing people who do not or cannotcomply with the insurance coverage mandate is less desirable thanthat proposed under the House bill. Under the House bill, the penaltyis 2.5% of an individual/family’s adjusted gross income per year. Bycontrast, the Senate bill imposes a regressive tax penalty of $750 peradult per year, regardless of income.
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 The Senate bill forbids people who have employer-sponsored insurancefrom receiving subsidies unless the employee share of the premiumexceeds 9.8% of their income, or the employer plan has an actuarialvalue of less than 60%. While this is an improvement from the Housebill, which places the limit at 12% of income, this requirement may stillbe burdensome on some low-wage workers.
HCFANY supports the affordability schedule adopted in the Senatebill, but prefers the affordability schedule in the House bill for lower-income families.
Medicaid. 
Medicaid is the safety net insurance coverage for poor peopleand people with disabilities in New York. The Senate bill offers Medicaid topeople with incomes up to 133% of the Federal Poverty Level (FPL). TheSenate also proposes to change Medicaid’s eligibility test to a gross incomeassessment which will eliminate disregards and make it easier for families toenroll in coverage. However:
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 The Senate bill will raise Medicaid eligibility levels to 133% of FPL, andrequires the federal government to fully fund the cost of expandingcoverage for three years for states who currently have lower eligibilitylevels. This policy rewards laggard states and penalizes states whoalready offer Medicaid coverage to families at higher income levels.New York already offers Medicaid to families with incomes up to 150%of the FPL and individuals without children up to 100% of the FPL.Senator Reid’s bill offers a modest improvement on the Senate FinanceCommittee bill in that it would procure 100% federal matching fundsfor single adults and childless couples between 100%-133% of FPL.
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 The House bill, on the other hand, raises Medicaid eligibility levels to150% of FPL and requires the federal government to fully fund thecosts of expanding coverage for the first two years. However, the
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states will be required to pay 9% of these costs thereafter. Under theHouse bill, all states would be treated equally.
HCFANY supports the Senate’s approach to expanding Medicaid coverage and changing the eligibility test to a gross incomeassessment. However, HCFANY recommends that the Senate movefurther to adopt the Medicaid eligibility levels put forth by theHouse bill to expand coverage to those up to 150% of FPL, and  provide federal funding fairly across all States.
Children’s Health Coverage.
Child Health Plus, New York’s StateChildren’s Health Insurance Program (SCHIP), offers comprehensive coveragewith an affordable sliding-fee premium scale for families up to 400% of theFederal Poverty Level (FPL). The Senate bill will preserve SCHIP and requirestates to maintain their eligibility levels through 2019. This is animprovement from the House bill, which would eliminate the SCHIP programand force children currently in the program into more expensive coveragethrough employer-sponsored plans, or the Exchange. The Senate bill alsooffers increased federal matching (FMAP) funds from 2014 to 2019, whichwill provide New York with needed federal assistance.
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In addition, Senator Bob Casey (D-PA) has offered an amendment tothe Senate floor that will maintain and strengthen CHIP, simplify theenrollment process for parents, guarantee children in SCHIP the samecomprehensive benefits that Medicaid children receive, and provide aminimum eligibility level of 250% of poverty so that there is a safetynet for children no matter where they live in the United States.
HCFANY strongly supports the Senate’s approach to children’shealth coverage and urges the Senate to adopt the Casey  Amendment to maintain and strengthen CHIP.
“Do-No-Harm” and Consumer Protections.
 
New York leads the nationwhen it comes to consumer protections in health care. For example, New York has “pure community rating,” which bans discrimination by insurancecompanies based on a person’s age, sex, health status, or race. The Senatebill preserves New York’s right to protect State residents from unfairinsurance practices and to provide stronger consumer protections than infederal law. The Senate bill also generally assigns to the states the authorityto operate the new health insurance exchanges created under the bill.
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