Financial Health Analysis for New York State under ACA - Research Paper Example

Financial Health Report for New York under ACA Financial Health Report for New York under ACA College Subject Abstract Many research studies have found that Affordable Care Act will bestow more benefits to NYS. Obama healthcare plan is aiming to offer more number of US citizens to have access to health insurance schemes , to create legal safeguard to consumers , and to establish mechanisms for citizens to buy healthcare insurance products by comparing various schemes available in the market. Healthcare policies which will be offered through the health insurance exchange is likely to cost less by 53% as compared to earlier healthcare policies bought in the market in 2013 or earlier.NY healthcare reform law offers to small business to claim tax credits up to 35% to facilitate them to make their insurance coverage more affordable. In 2014-15, Medicaid spending by New York is anticipated to be around $58.2 billion. Medicaid Redesign team (MRT) is expected to reduce the healthcare cost in NYS thereby able to save both in Federal and State governments’ funds up to $17 bn per annum by the end of 2014-15. Obamacare is not going to replace the Medicare scheme in New York State. A major provision in ACA mandates New Yorkers who are presently uninsured either to purchase a coverage or to pay a penalty. This research study will make an attempt to analyze the financial implication for the New York State for implementing the Affordable Care Act , its advantages and disadvantages , and how reforms will change the healthcare policies of NYS and its impact on the New Yorkers. I. INTRODUCTION/BACKGROUND ON NEW YORK STATE and brief comparison of New York to nation a. Poverty As per NYSCAA (2013), New York State (herein after will be referred as NYS) total population as of March 2013 was estimated at 19,389.160 and state poverty stood at 15.1% and individuals at poverty was estimated at 2845,024 as of March 2013. b. Percent Uninsured As per Kff.org, uninsured against healthcare coverage in NYS was estimated at 2908,374, which was about 12% of the NYS population as 2012. c. “Per enrollee Medicaid spending” As compared to the year 2000 with that of 2012, NYS Medicaid registration increased by more than 80% statewide thereby covering about 5 million New Yorkers. Due to shift in local economy and changes in policy, there is a substantial increase in the enrollment for Medicaid in NYS in recent years. Due to considerable increase in enrollment for Medicaid in NYC, spending on Medicaid by local, state and federal soared to the aggregate of $44.5 billion in 2012 alone (ibo.nyc.ny.us 2013). d. Population size and health status The prevalence of asthma among adult New Yorkers soared from 7.6% in 2001-2003 to 9% in 2007-2009. Further, between 2007 and 2009, 8% of New Yorkers were identified with diabetes. About 99,281 cases of chlamydia were reported in New York State in the year 2010. In New York State, the HIV new case rate fell down to 21% from that of 21.3% per 100,000 between 2005 and 2009. There has been about 66,642 deaths reported in NYS in 2009, which were due to poor diet, tobacco use, alcohol consumption and lack of physical activities (health.ny.gov 2013). e. “Fiscal capacity of state” II. New York State Budget for the year 2014-15 During the year 2013-14 , NYS received a total receipt of $14.07 billions as receipts from various sources like personal income-taxes,federal government aid, etc., and it incurred a total expenditure of $ 14.08 billions,which includes health care expenses also. Further , for the year 2014-2015 , total receipts have been estimated at $14.19 billions against estimated expenditure of $14.21 billions (www.osc.state.ny.us 2014). “Health Care Spending” During the year 2013-14 , New York State has spent $1.79 billion on healthcare amenities, which includes both spending on Medicaid and other health care programs. It is to be noted that healthcare expenses of NYS comprise of 12.60% of its combined spending for the year 2013-14 (www.osc.state.ny.us 2014). III. PRIOR HEALTH CARE REFORM POLICY [OR POLICIES a. Waivers or other key reforms ChPlus- Child Health Plus is a health program where every uninsured child who is under the 400% (earlier 250% in 2008) Federal Poverty Line (FPL) is eligible to claim health insurance. FHPlus Premium Assistance program and FHPlus Buy-In program were introduced to offer cost-efficient, comprehensive coverage to employees and employers. FHPlus is awaiting for Federal approval,and if implemented, FHPlus will offer coverage to those who are in 200% FPL, which will cover about 400,000 New Yorkers who were earlier uninsured. As of 2009, FHPlus already covered single adults up to 100% FPL and parents with income levels up to 150% FPL. In 2009, to reach the 1.2 million New Yorkers who were then eligible for public programs but not registered and New York State perused reforms to strengthen public program eligibility criteria and for renewal. New York State healthcare reforms include authorizing attestation of residency and income during renewal, cancelling the face- to -face interview while registering, cancelling the resource test community FHPlus and Medicaid, cancelling the procedure for the vestiges of welfare entitlement regulations including drug and alcohol screening and finger imaging , creating single eligibility criteria for childless couples and single adults , replacement of county-specific levels , cancelling age oriented eligibility criteria for kids in Medicaid and permitting kids aging out of foster care to use Medicaid up to 21 age (Brooks & Daines, 2009, p.4). NYS in 2008 minimized inpatient hospital reimbursements by $224 million and introduced radical changes to flawed outpatient reimbursement procedure. NYS also invested $300 mn in reimbursement for community health centers, hospital clinics, and physicians. There was further reduction in inpatient rates in 2009, and NYS injected an extra $300 million in outpatient services (Brooks & Daines, 2009, p.5). Health NY offers New Yorkers with income up to 250% FPL and eligible small businesses with suitable health care plans. Public Health Insurance for All – (PHIA) – This is a state sponsored program, which will cover all those New Yorkers who are not entitled register with an existing public program. Under this, individual and employer spending is eliminated and there is an increase in government spending from $57.7 billion to the aggregate of $86.3 billion. This reform is contemplating to achieve a complete coverage with highest redistribution of health care spending thereby incurring the lowest aggregate change in health care spending of $2.4 billion and the highest cost to NYS for coverage of newly insured ,which is estimated at $21,287 per individual per annum (Brooks & Daines, 2009, p.5). New York Health Plus: Under this , all New Yorkers can register in the present FHPlus program supplied through managed care plans, and this includes supplemental and private health insurance also. There will be a 10% pay roll tax of all uncapped wages for all workers and employers. For those, who have registered with private coverage are eligible to claim a tax credit to counterbalance their payroll tax liability (Brooks & Daines, 2009, p.5). The Freedom Plan: This plan minimizes the regulation of private insurance market and foots upon government-funded stop loss and tax credits to expand its coverage. This scheme allows insurers to offer high-deductible health insurance policies, which are exempt from benefit mandates available in New York’s State individual market. Ten-year credit is available for small businesses and individual under this scheme (Brooks & Daines, 2009, p.6). IV. “OUTCOMES OF PAST REFORM” Obama healthcare plan is aiming to offer more number of US citizens to have access to health insurance schemes , to create legal safeguard to consumers , and to establish mechanisms for citizens to buy healthcare insurance products by comparing various schemes available in the market. Obama healthcare reform is aiming at the following: Facilitating more uninsured lower-income peope to subscribe for Medicaid who were uncovered earlier. To stimulate businesses to offer health insurance coverages to their staffs. To offer credits to buy private health insurance coverage to those Americans with moderate income levels who do not eligible for Medicaid . Introduction of Health Insurance Exchange to streamline the purchase of health insurance by the Americans. To offer more transparency and to augment consumer protections. To introduce safeguards to protect against irrational price increases. To motivate preventive and primary care. To make the majority of the Americans to buy health insurance policies at an affordable cost by granting tax rebates and incentives (Healthcarereform.ny.gov, 2014). New York State has the option to set up its own health insurance exchange. For the majority part , Federal health reform mandates a floor and not a celing thereby permitting states to offer safeguards greater than those provided under Federal law. There is more beneficial to New York State as it is already offering strong consumer protections , like community rating and open enrollment that make sure the access to the health insurance coverage irrespective of the disparities like sex ,age , occupation and health status. New York State administration will work in cooperation with the Federal government to apply the Federal law and to synchronize it with New York law (Healthcarereform.ny.gov, 2014). Salient Features of New York Health Care Reforms As per A8460/55800 which is the New York State’s insurance and Public health reform law , funding is made availble to New Yorkers with pre-existing condition through the expanson of temporary high-risk pools. When this program is functioning , these New Yorkers can have access to insurance coverage without pre-existing condition like waiting period limitations. NY healthcare reform law offers to small business tax credits up to 35% to facilitate them to make their insurance coverage more affordable. A one-time $250 rebate check will be sent to Medicare Part D enrollees who reached the donut hole. Under reform law , those adult children up to the age of 25 can remain with their parent’s insurance policy if their parents so wish. Further , reform law forbids health insurance companies from putting lifetime limits on the aggregate amount of insurance coverage that a family or an individual can receive. These limits can create serious issues for New Yorkers with chronic ailment or disease that is too expensive to offer treatment. Now , health insurance companies are not allowed to drop citizens from health insurance coverage after they suffer from disease due to their inadvertent on their paperwork. The heath care reform mandates that insurance companies cannot show discrimination against Children with pre-existing conditions. Further , the reform law also forbids insurance companies from putting annual caps on the amount spent on heath care. The reform law stipulates that there would be no additional cost to citizens with health insurance coverage for the use of preventive care services. Under reform law , a citizen is free to appeal against the insurance company for its actions,and the preference or choice of primary care providers is now assured (Statebudgetcrisis.org,2014). V. CURRENT STEPS UNDER ACA a. Insurance exchange In 2013, NYS established a New York Health Benefit Exchange which will act as a centralized marketplace to buy health insurance products , to compare and contrast health insurance policy’s benefits and prices and to register in a healthcare plan as per Affordable Care Act(ACA). Thus , healthcare policies which will be offered through the exchange is likely to cost less by 53% as compared to earlier healthcare policies bought in the market in 2013 or earlier. As of January 17, 2014, about 580,000 New York citizens have applied for healthcare insurance through the exchange and more than 326,000 people enrolled in the scheme. Availability of Federal funds for the New York Health Benefit Exchange is likely to end by January 1, 2015. NYS executive budget has provided $54.3 million for the year 2014-15, which is likely to increase to $148.3 million in state funding to retain the continuous operations (Mystateofhealth,2014). b. Medicaid expansion In New York State, over 5 million New Yorkers receive Medicaid eligible services each month, mainly through a network in excess of 60000 health care providers and through in excess of 15 managed plans. In 2014-15, Medicaid spending by New York is anticipated to be around $58.2 billion. a. Other [Global budget, managed care, premium assistance] The present annual health insurance premium for commercial purposes is about $5,967 per member which has witnessed a substantial increase of about 8.5% in the last six years in NYS. The Finger Lakes Health System Agency ( FLHSA) whose bottom-up regional health planning process has offered lowest Medicare cost in Rochester area, which is considered to be the lowest healthcare cost in USA while at the same juncture enhancing health outcomes. Medicaid Redesign team (MRT) is expected to reduce the healthcare cost in NYS thereby able to save both in Federal and State governments’ funds up to $17 bn per annum by the end of 2014-15. The Medicaid waiver as proposed by NYS is currently pending for the Federal government for approval and is likely to result in $10 bn savings, which the NYS is likely to reinvest the same in its healthcare delivery system. V. ANTICIPATED EFFECTS OF REFORM UNDER ACA a. Insurance coverage, premiums, access Starting from October 1, 2013, New York State was mandated by Federal law to have in force a new online market place where New Yorkers can purchase healthcare insurance plans. NYS will be offering five tiers of Obamacare Health Exchange Plans namely platinum, gold, silver, bronze and catastrophic. The cost of health insurance under Bronze will be a bare minimum and if a New Yorker is healthy and young, he may opt for bronze or silver schemes at an affordable cost. If a New Yorker is in the lower-income brackets, he may opt for silver or bronze, as NYS will offer financial assistance on a slewing scale to pay the health insurance premiums and with better benefits (Nymag.com, 2013). b. Medicaid coverage, efficiency/ cost , equity New York State’s Medicaid coverage is the largest, and most expensive in USA. New York State spends a huge amount on Medic aid as compared to other states like Texas, Florida and Pennsylvania mingled together. In 2009, NYS spent $9056 per enrollee, which was 69% higher than the national mean of $5357, In New York City, the nursing-home care is likely to cost over $100,000 per individual per annum. Further, NYS spent $30,267 per disabled Medicaid enrollee, which was 200% higher than the national average of $14,840. However, many studies have found that Affordable Care Act will bestow more benefits to NYS. Further, Federal Deficit reduction is threatening the New York healthcare budget as a cut by 10% in Federal grants to NYS will be likely to lose about $ 6 million per annum. Thus, the New York State’s per-capita loss is likely to be more than 50% higher than the national average. The NYS imposed a cap on its Medicaid growth if introduced as envisaged and maintained, could enhance the NYS long-term fiscal outlook remarkably (Statebudgetcrisis.org, 2014). c. Other --effects of innovation in reform (on efficiency and equality) Under Affordable care Act, seniors enrolled on Medicare will be likely to realize the impact of Obama’s health reform in their doctor’s office , where services like diabetes and cholesterol checkups , annual wellness checkups and immunizations and test for cancer are now being now offered without any co-payments. Obamacare is not going to replace the Medicare scheme in New York State. A major provision in ACA mandates New Yorkers who are presently uninsured either to purchase a coverage or to pay a penalty. Under Medicare, beneficiaries are not required to purchase anything during the ACA enrolment period. Seniors on Medicare can change their insurance plans and prescription coverage drugs if they wish particularly during the Medicare open enrolment period. Medicare beneficiaries are likely to pay more for their medication under Obamacare as those who earn $85000 individually and $170,000 per couples have to shell out more for their prescription drugs. Majority of seniors are likely to incur less on their drugs as, a coverage gap that compels Medicare beneficiaries to shell out 100% of their cost of prescription drugs up to some amount. Until this gap is plugged in, seniors are likely to receive a 47.5% discount on some branded drugs and 21% discount on generic drugs. About 3.5 million Medicare beneficiaries saved about $706 each in the year 2012 alone. a. Fiscal capacity The New York State estimated a thirteen percent soar in the State’s Medicaid funding for the fiscal year 2012 as of January 2011, which mirrored an 8.4% increase in aggregate Medicaid spending and incurred a deficit of $2 billion under federal stimulus funds American Recovery and Reinvestment Act (ARRA). The following three chief provisions to restrict the State’s Medicaid spending were introduced: The annual increase in the state DOH Medicaid spending has been set with a statutory cap, which is linked to the ten-year average transformation in the medical element of the consumer price index, which is approximately estimated at 4%. $2.2 billion reduction for the two-year allocation for Medicaid from the drift in state’s fund growth in the fiscal year 2012 and a 4% enhancement from that new base for the fiscal year 2013 by employing the CPI associated growth initiative. To keep DOH Medicaid spending within the limits of the CPI-associated cap, extraordinary power is delegated to the New York State Commissioner of health to make unilateral changes to the Medicaid program. NYS has established Medicaid Redesign Team (MRT) to establish and manage cost saving initiatives in Medicaid. There were 78 discreet MRT steps in the fiscal year 2012 budget with projected savings of$1.1 billion in 2013 and $$973 million in fiscal year 2012. Thus, the NYS was able to keep the Medicaid spending growth to the legislated limit of $15.3 billion in SFY 2011-2012. Further, the majority of the projected saving will solely rely upon the eager engagement of health care industry stakeholders and on timely federal approvals,and but for these , there can be no guarantee that savings will be accomplished (Health.ny.gov,2014). Does it allow for empowerment and democratic responsibility? As per Congressional Budget office, the ACA is likely to reduce the 2 million full-time employment opportunities thereby offering Republicans to raise a fresh line of attack thereby placing the Democrats on the defensive. As per critics, the ACA will be likely to minimize the full-time employment opportunities, worked hours as the expansion of insurance coverage will make more people decide not to work , and such mentality may result in reduction of 2.5 million whole-time jobs. The budget office also predicted that due to ACA, about a million lesser Americans than anticipated would likely to receive health insurance coverage during 2014 from marketplaces, mainly due to troubled rollout of exchange. Further, due to ACA, there will be lesser one million beneficiaries to be covered under Children’s health and Medicaid insurance plan coverage. The budget offices also foresee that the budget deficit is likely to fall to $514 billion in the 2014 fiscal year which is about three percent of economic output , from $1.4 trillion in 2009 and some economists regard deficits of that extent to be maintainable in the long run (Lowery & Welsman 2014). The Impact of ACA for New Yorkers Under ACA , New Yorkers will have a wide range of medical coverage with more wide-ranging be nefits under “ essential health benefits.” Under ACA , each health insurance plan has to spend eighty-two cents of every $1 and if not , they have to compensate the consumers by way of rebates.Under ACA , premium will be much less and insurance policy will have to cover more services and benefits as each health plan has to cover a poignant percentage of average costs .Under ACA , New Yorkers will receive more wide-ranging coverages like pediatric, vision care , dental and prescription drugs, which were not available to them earlier to 2014. Under ACA , many preventive services like screening for cancers, blood pressure, and obesity , childhood immunizations , mental health screening will be covered free of charge. Under ACA , a New Yorker cannot be asked to pay a higher premium if he has poor health status and cannot be denied for medical insurance coverage for preexisting conditions. Under ACA , every New Yorker has to buy a health insurance plan else he has to pay a penalty .Due to federal subsidies and expansion of Medicaid , now , New Yorker who falls under the low-income group also eligible to have a health insurance policy and youngesters under the age of 26 is having the choice to stay under their parent’s medical policy. Some New Yorkers shall be even eligible for subsidies, which will facilitate them to defray their out-of-pocket expenses and their health insurance premiums . (Nyhpa.org, 2014). Conclusion New York State healthcare reforms include authorizing attestation of residency and income during renewal, cancelling a face- to -face interview while registering, cancelling the resource test community FHPlus and Medicaid, cancelling the procedure for the vestiges of welfare entitlement regulations,including drug and alcohol screening and finger imaging , creating single eligibility criteria for childless couples and single adults , replacement of county-specific levels , cancelling age oriented eligibility criteria for kids in Medicaid and permitting kids aging out of foster care to use Medicaid up to 21 age. New York State has the option to set up its own health insurance exchange. For the majority part , Federal health reform mandates a floor and not a celing thereby permiting states to offer safeguards greater than those provided under Federal law. There is more beneficial to New York State as it is already offering strong consumer protections , like community rating and open enrollment that make sure the access to the health insurance coverage irrespective of the disparities like sex ,age , occupation and health status. New York State administration will work in cooperation with the Federal government to apply the Federal law and to synchronize it with New York law. The Finger Lakes Health System Agency ( FLHSA) whose bottom-up regional health planning process has offered lowest Medicare cost in Rochester area, which is considered to be the lowest healthcare cost in USA. The cost of health insurance under Bronze will be a bare minimum and if a New Yorker is healthy and young, he may opt for bronze or silver schemes at an affordable cost. If a New Yorker is in the lower-income brackets, he may opt for silver or bronze, as NYS will offer financial assistance on a slewing scale to pay the health insurance premiums and with better benefits. As per Congressional Budget office, the ACA is likely to reduce the 2 million full-time employment opportunities thereby offering Republicans to raise a fresh line of attack thereby placing the Democrats on the defensive. Under the ACA , it is estimated that more than one million NY residents who were earlier uncovered from insurance will be receiving health insurance coverage,mainly due to market place reforms , federal subsidies and Medicaid eligibility. References Brooks, K & Daines, R. (2009, July 17). Reform to Achieve Quality , Affordable Coverage for all New Yorkers. Retrieved April 20, 2014, from http://www.health.ny.gov/health_care/reports/docs/2009-07-17_release_of_urban_institute_report.pdf Health.ny.gov (2013). General Health Status – New York State -2012 Retrieved April 20, 2014, https://www.health.ny.gov/prevention/prevention_agenda/2013-2017/docs/general_description.pdf Health.ny.gov.(2014, April 14). Medicaid Redesign Team- New York State Department of Health. Retrieved April 21, 2014, https://www.health.ny.gov/health_care/medicaid/redesign Healthcarereform.ny.gov.(2014).Federal Health Care Reform in New York State. Retrieved April 21, 2014, http://www.healthcarereform.ny.gov/summary/ ibo.nyc.ny.us. (2013, October). Growth in New York’s Medical Enrollment and Costs. Retrieved April 20, 2014, from http://www.ibo.nyc.ny.us/iboreports/2013medicaid.html Lowery, A & Welsman J. (2014). Health Care Law Projected to Cut the Labor Force. Retrieved April 20, 2014, http://www.nytimes.com/2014/02/05/us/politics/budget-office-revises-estimates-of-health-care-enrollment.html Mystateofhealth (2014). More than 908,000 New Yorkers Enrolled on NY State of Health. Retrieved April 21, 2014, < http://www.healthbenefitexchange.ny.gov/news/press-release-more-908000-new-yorkers-enrolled-ny-state-health> Nyhpa.org. (2014).6-Ways ACA –The New York Health Plan Association. Retrieved April 21, 2014, from Nymag.com. (2013, January 10). A New Yorker’s Guide to Signing up for Obama care. Retrieved April 21, 2014, < http://nymag.com/daily/intelligencer/2013/09/new-york-guide-to-signing-up-for-obamacare.html> Osc.state.ny.us. (2014). Executivebudget2014. Retrieved April 21, 2014, http://www.osc.state.ny.us/reports/budget/2014/executivebudget2014.pdf Statebudgetcrisis.org. (2014). New York Report: State Budget Crisis Task Force. Retrieved April 21, 2014 www.statebudgetcrisis.org/wpcms/wp-content/images/NY-Report.pdf‎ Read More