New York: Essential Plan expansion to ~100K more just went into effect, including DACA recipients!

New York's implementation of the ACA's Basic Health Plan provision (Section 1331 of the law) is called the Essential Plan. It currently serves 1.2 million New Yorkers, or over 4x as many residents as ACA exchange plans do.

Whenever I write about BHPs I always throw in a simple explainer about what it is, with an assist from Louise Norris:

Under the ACA, most states have expanded Medicaid to people with income up to 138 percent of the poverty level. But people with incomes very close to the Medicaid eligibility cutoff frequently experience changes in income that result in switching from Medicaid to ACA’s qualified health plans (QHPs) and back. This “churning” creates fluctuating healthcare costs and premiums, and increased administrative work for the insureds, the QHP carriers and Medicaid programs.

The out-of-pocket differences between Medicaid and QHPs are significant, even for people with incomes just above the Medicaid eligibility threshold who qualify for cost-sharing subsidies.

The Basic Health Program (BHP) – section 1331 of the ACA — was envisioned as a solution, although most states did not establish a BHP. Under the ACA (aka Obamacare), states have the option to create a Basic Health Program for people with incomes a little above the upper limit for Medicaid eligibility, and for legal immigrants who aren’t eligible for Medicaid because of the five-year waiting period.

In short, if you earn up to 138% FPL, you enroll in Medicaid; from 138 - 200% FPL, you enroll in a Basic Health Plan policy (BHP); at 200% FPL or higher, you enroll in a Qualified Health Plan policy (QHP).

Federal funding for BHP programs is supposed to be equal to 95% of the total amount of advance premium tax credits (APTC) and cost sharing reduction (CSR) assistance that the enrollees would otherwise have been eligible for had they otherwsie enrolled in a QHP using the ACA exchange.

Of course, the state itself can also throw in additional funding to make the BHP plans more generous if they wish...which is a key point to keep in mind. The coverage has to be at least as affordable and at least as good as a benchmark silver plan with Cost-sharing reduction benefits applied.

As I wrote about several times last year, New York has expanded the population eligible for the Essential Plan up the income scale from 200% FPL to 250% FPL:

On March 1, 2024, the U.S. Department of Health and Human Services (HHS) and U.S. Department of Treasury approved New York's Section 1332 State Innovation Waiver application to expand the Essential Plan.  Section 1332 State Innovation Waivers allow states to pursue innovative strategies for providing residents with access to high quality, affordable health insurance.  The waiver was approved for five years, from 2024 through 2028.

...Key Components of the Waiver

This approved State Innovation waiver expands health insurance and covers health-related social needs, improving health care and advancing health equity.  The waiver includes the following key components: 

  • Extending Affordable Health Insurance to Over 100,000 New Yorkers – The Essential Plan will be expanded to New Yorkers with incomes between 200 and 250 percent of the FPL, making the high quality, affordable program available to over 100,000 additional New Yorkers.
  • ...Promoting Individual Market Premium Stability – Federal funding from this waiver will also support an Insurer Reimbursement Implementation Plan established to mitigate premium increases for individual market enrollees from the impact of the population with estimated household income 200-250% of FPL moving to the Essential Plan. In addition to maintaining stable premiums in the individual market, this waiver will also support stability with respect to plan participation for the individual market.

Short version: New Yorkers who earn between 200 - 250% FPL are now eligible for the Essential Plan, which is a much better value for the vast majority of them than even heavily subsidized ACA plans.

The "Insurer Reimbursement" program is interesting. 62,000 of the 288,000 New Yorkers who enrolled in ACA exchange plans during the Open Enrollment Period (21.5%) earned 200 - 250% FPL. The "Reimbursement Plan" is to reduce the impact of those ~62K enrollees shifting over to the Essential Plan instead...something which you never hear about happening when a state like North Carolina newly expands Medicaid to their 100 - 138% FPL enrollees, I should note. Huh.

In any event, the upgrade for those ~62K enrollees (along with another estimated ~38K new Essential Plan enrollees, I presume) just went into effect:

New York State Department of Health and NY State of Health Announce the Essential Plan Expansion Increasing Access to Affordable Health Insurance Begins Today

  • Starting Today, Residents Earning Up to $37,650 Now Qualify for NY State of Health Essential Plan Coverage Offers High-Quality Coverage With $0 Monthly Premium and Low Cost Sharing

ALBANY, N.Y. (April 1, 2024) – The New York State Department of Health and NY State of Health today announced the highly anticipated expansion of the state’s Essential Plan public health insurance program takes effect today, April 1. The program now includes residents with incomes up to $37,650, 250 percent of the Federal Poverty Line, bringing high-quality premium-free health insurance to an additional 100,000 New Yorkers, saving them an average of $4,700 per year.

“The State’s Essential Plan, offered through NY State of Health, has always served as a vital source of health coverage for those who need it,” State Health Commissioner Dr. James McDonald said. “With the launch of this expansion today we are now able to reach even more New Yorkers as we continue our mission to eliminate health disparities and deliver high-quality, affordable insurance statewide and this expansion will reach almost 100,000 individuals, saving them thousands of dollars a year, and giving peace of mind that their health needs will be met.”

“This is a first of its kind 1332 waiver that moves New York’s Basic Health Program to a State Innovation Waiver that permits New York to expand eligibility to consumers with annual income up to $37,650, including the Deferred Action for Childhood Arrival (DACA) population,” NY State of Health Executive Director Danielle Holahan said. “Through this expansion of $0 Essential Plan coverage, we hope to hold steady and even increase the gains in health insurance coverage we saw during the public health emergency.”

The expansion follows federal approval of New York’s section 1332 State Innovation Waiver application. This waiver authority allows states to pursue innovative strategies for providing residents with access to high-quality, affordable health insurance. New York’s waiver was approved for five years, from 2024 through 2028. This expansion of coverage is estimated to save New Yorkers an average of $4,700 per year, compared to what they would have spent on health coverage through Qualified Health Plans.

Starting today, an individual earning $37,650 annual income is eligible for the Essential Plan, making the high-quality, affordable program with a zero cost monthly premium available to an additional 100,000 New Yorkers, including Deferred Action for Childhood Arrival (DACA) recipients. This is an increase from the prior limit of roughly $30,000 annual income for an individual.

New Yorkers who completed a NY State of Health application during 2024 Open Enrollment but did not enroll in coverage and now meet the expanded Essential Plan eligibility will receive emails, texts, and outreach from their enrollment assistors that they are eligible for the Essential Plan expansion and must select and enroll in a health plan.

Starting today, first-time applicants of the NY State of Health who meet the Essential Plan expansion eligibility criteria can enroll in the program.

Information about Section 1332 State Innovation Waivers, including a fact sheet on New York’s waiver, can be found on CMS’ website.

This is a big deal overall, and the DACA inclusion is a nice bonus (around 28,000 DACA recipients live in New York; a prior NYSoH press release estimated that around half of them earn less than 250% FPL.