BILL NUMBER: S8614
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the social services law, in relation to the basic health
program (Part A); and to amend the financial services law, in relation
to consumer protection from health care costs; and to repeal certain
provisions of such law relating thereto (Part B)
 
PURPOSE:
The purpose of this bill is to establish a comprehensive set of reforms
aimed at improving health equity, expanding affordable coverage options,
and strengthening consumer protections within New York's health system.
The bill seeks to enhance access to care, support safety-net providers,
and address rising healthcare costs through targeted policy changes.
 
SUMMARY OF PROVISIONS:
Section one establishes that this act shall be known and cited as the
"Health equity, affordability, and reform act."
Section two consists of Part A and Part B.
Part A amends section 369-gg of the social service law to:
*Allow New Yorkers who are not eligible for the basic health program
based on household income or the fact that their employer offers health
care coverage, the opportunity to "buy-in" and purchase coverage under
the basic health program for themselves, an eligible spouse and or
dependent children, by paying the per-member, per-month premium basic
health plans receive for such individuals today;
*Allow eligible small groups to contribute to the cost of coverage for
eligible individuals through the buy-in option;
*Authorize the commissioner to apply to the secretary of health and
human services for all available federal waivers and permission neces-
sary to be able to receive all available cost sharing reductions and
advance premium tax credits for individuals who would participate in the
buy-in program;
*Add new definitions for the basic health program buy-in, including the
definition of small groups that would be eligible to contribute to costs
of coverage for eligible persons;
*Increase the eligibility under the basic health program to 250% of the
federal poverty line, and require the commissioner of the department of
health to expand full eligibility under the basic health program to
immigrants below 250% of the federal poverty line without regard to
federal financial participation;
*Revise the premium owed under the basic health program such that indi-
viduals with household incomes below 200% of the federal poverty line
would not owe any premium, and make the premium owed for individuals
with household incomes between 200 -250% of the federal poverty line
twenty dollars per month;
*Require the commissioner to subsidize the buy-in premium under the
basic health program buy-in to the maximum extent possible for individ-
uals and families with household income below 500% of the federal pover-
ty line ($67,950 for an individual);
*Establish subsidy equivalency payments, which would require eligible
small groups who contribute to the costs of coverage through the buy-in
to pay an amount to the basic health program trust fund that is equal.
to the amount the coverage was subsidized for an eligible individual by
advanced premium tax credits and cost sharing reductions;
*Provide the commissioner's discretion to consider, once enrollment in
the buy-in has reached 100,000 individuals, whether rates of payment to
providers should be increased based on enrollment;
*Require individuals with household incomes above eight hundred percent
of the federal poverty line who purchase coverage through the buy-in to
make premium supplement payments to contribute additional funds to the
basic health program; and
*Provide the commissioner discretion to consider, once enrollment has
reached 100,000 individuals, whether eligible small groups should make
premium supplements and in what amounts, to subsidize basic health
program costs and increase payment rates to providers under the program.
Part B repeals article six of the financial services law and adds a new
article six which:
*Establishes a default rate for out-of-network payments under commercial
insurance;
*Revises the current "annual out of pocket maximum" under health insur-
ance plans to be inclusive of premium contributions and establishes that
the annual out of pocket maximum shall vary based on income;
*Sets limits on permissible healthcare reimbursement for hospital and
ambulatory surgery services at 240% of the Medicare benchmark; and
*Establishes three tiers of hospital and ambulatory surgery center
reimbursement, such that tier 1 (lowest cost providers) could grow
reimbursement without limit, tier 2 (medium to 95% of all statewide
facilities) would have a price growth cap of 2.5% or CORE CPI (CPI vola-
tile food and energy prices) plus 1% , and tier 3 (any facility in the
top 5%) would not be permitted to increase reimbursement, while also
remaining subject to the 240% Medicare cap.
This Part also amends sections 5201 and 5231 of the civil practice law
and rules to ban certain predatory medical payment recoupment practices.
Section three establishes the effective date.
 
JUSTIFICATION:
While New York's healthcare system is world-class and provides excep-
tional care, it is also generally unaffordable and inequitable in terms
of service access. Though there are many factors that contribute to
persistent health inequities, the common denominator is always cost.
The Health Equity, Affordability, and Reform Act (HEARA) is an effort to
tackle this issue head on, to make health care more affordable for all
New Yorkers while addressing specific affordability issues for middle-
and lower-income individuals. The totality of HEARA can be implemented
expeditiously, without the need for Federal legislation, and in ways
that do not require any new state share spending or new taxes. As a
result, New York's healthcare system would become more just, equitable,
and affordable for all.
Part A - Essential Plan Buy-in. Outside of government regulated health
care programs, health care costs in this state have increased year after
year at levels beyond inflation or any rational measure of economic
output. In ten years, the average New York family's health insurance
premium of $20,000 today will grow to $35,000, and in 20 years, will be
$64,000, Out-of-pocket costs are growing as well. Higher premium
contributions, along with higher deductibles, copays, and coinsurance,
have become employers' and health plans' responses to health care cost
growth. And, as is usual in health care, the consumer is caught in the
middle. As health care costs continue to increase, premiums and out-of-
pocket costs are taking a large and ever-growing share of one's avail-
able resources away from necessities like food and childcare and limit-
ing opportunities for advancement through education and savings. This is
true even for those we count among the insured. These costs not only
impede health access, but they also act as barriers to economic opportu-
nity and social mobility.
Those who earn just too much to qualify for subsidized coverage under
the Essential Plan bear the brunt more than anyone. Today, a family of
four making $76,000 (275% FPL) would be eligible for premium tax credits
but are expected to pay full price for health care coverage through the
Qualified Health Plan marketplace. While the Affordable Care Act has
been immensely valuable in many respects, it does not always provide the
uninsured with "affordable" health care options. For those individuals
and families who undertake the financial commitment to pay for coverage
through the QHP marketplace, it is disheartening for many to learn that
their coverage is first subject to a high deductible, or high co-insu-
rance, which severely limits access for many middle- and lower-income
New Yorkers. This legislation expands the Basic Health Program to allow
all New Yorkers the opportunity to purchase affordable coverage for
themselves and their families, with low or no copays and no deductibles.
The Essential Plan buy-in would create the first ever public-private
health insurance buy-in option that incorporates principles of equity
into its design, determining how much eligible individuals are expected
to pay for health care coverage based on inc ome and using payments from
those who can afford to pay more to help subsidize the costs of those
who cannot. It could provide hundreds of thousands of New Yorkers with a
much more affordable health care option in an extremely short time and
in a way that is revenue neutral for the State.
Part B- Medical Insurance Payment & Practices. While most providers
actively look to participate in health plan networks, there are provid-
ers who do not engage in good faith negotiations with plans, have no
intention to participate in plans, and increase charges annually as part
of their business practice to benefit themselves under the state's Inde-
pendent Dispute Resolution Process. The result is annual costs increases
and insurers that feel pressure to lower spending elsewhere. It is a
cycle that is sorely in need of reform. Since the Federal No Surprises
Act (NSA) defers to state law where a state has established a payment
rate or methodology to determine reimbursements for out-of-network
services in a state's commercially insured markets, New York has the
ability to take the consumer out of healthcare disputes by establishing
a new default reimbursement process. Other states are pursuing similar
mechanisms to address this issue. The Massachusetts Health Department
was asked by its legislature to develop a report to make recommendations
for establishing a default out-of-network reimbursement rate. The
produced report recommended the establishment of default reimbursement
rates for out-of-network emergency and non-emergency health care
services in the fully insured market at a health plan's median
contracted rate. The report noted this would be a reasonable approach
that would result in savings to the healthcare system, providing relief
to patients. It would also be administratively feasible for the state
and all relevant parties, as the NSA's reliance on QPA("Qualifying
Payment Amount"), which is defined as the median contracted rate for a
given service in the same geographic region within the same insurance
market, already requires health insurers to determine QPAs for services.
Furthermore, thanks to the good work of the Consumer Service Society of
the State of New York, we are aware of the predatory practices some
providers have implemented to seek repayment of medical expenses. This
section enacts various protections which will ultimately and overwhelm-
ingly protect middle class and lower income New Yorkers. Additionally,
this section implements changes to the annual out-of-pocket maximum
payment in health plans, which would give consumers the peace of mind
that they will never go bankrupt or incur medical debt for needed care,
or need healthcare that is above and beyond what they can afford.
 
LEGISLATIVE HISTORY:
FY 2022 - S9508
 
FISCAL IMPLICATIONS:
This bill will have minimal impact on the State and no impact on local
governments. The impact is determined based on the state discretion
around implementation and program design.
 
EFFECTIVE DATE:
This act shall take effect immediately.