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Medicaid, SCHIP, & Federal Authority

  • Section 1115 Waiver – In 1997, the Centers for Medicare and Medicaid Services (CMS) approved New York’s section 1115 Medicaid demonstration, the Partnership Plan, in which Medicaid beneficiaries began receiving benefits through  mandatory managed care.  In 2001, CMS approved New York’s Family Health Plus (FHPlus) amendment. FHPlus expanded health insurance to childless adults with incomes up to 100 percent of the federal poverty level (FPL) and expanded coverage to parents with incomes up to 150 percent of the FPL.  Prior to 2001, these populations were covered in the state’s Safety Net program.  FHPlus is delivered via managed care organizations and has a less comprehensive benefit package than traditional Medicaid.  In 2002, the waiver was amended to include a family planning demonstration which expands family planning services to individuals with net incomes at or below 200 percent of the FPL.  In 2007, New York further amended the waiver to include a premium assistance program in FHPlus. If an FHPlus enrollee has access to employer-sponsored health insurance, such coverage must be evaluated to determine if it is cost effective for the State to pay the employee’s share of the health insurance program as opposed to Medicaid.  Such analysis must include the cost provided to FHPlus enrollees of the wrap-around services.

    Section 1115 Waiver – In 2006, New York was approved for a new Section 1115 Medicaid demonstration, the Federal-State Health Reform Partnership (FSHRP).  Under this demonstration, New York is undertaking significant reforms to promote the efficient operation of its healthcare system by reducing excess capacity in acute care hospitals, shifting emphasis in long-term health care to community settings, investing in health IT, and reorienting the healthcare system to a value-based outpatient and primary care driven system which rewards quality.  The federal government will provide federal financial participation for designated state-funded health programs which serve low-income and uninsured individuals, not otherwise eligible for federal matching funds. After incurring expenditures, the state may draw down federal match only as it is ready to expend state funds on the specified health reform initiatives.  Once the state meets required milestones, the federal government will provide up to $300 million per year to allow the state to invest in the agreed upon healthcare reforms.  Failure to meet a milestone will result in cessation of federal matching funds.  New York is required to generate $3 billion in gross Medicaid savings over the 5-year demonstration period. Additionally, the FSHRP demonstration transfers the authority from the Partnership Plan demonstration to enroll adults with disabilities, children with disabilities, and older adults in managed care.


  • The Healthy New York Program is a state-subsidized reinsurance mechanism that reimburses health plans for 90 percent of claims paid between $5,000 and $75,000 on behalf of a member in a calendar year.  All Health Maintenance Organizations (HMOs) are required to write HealthyNY.  Since its inception in 2001, HealthyNY has enrolled more than 300,000 workers and their families.  As of December 1, 2006, the program had approximately 131,000 enrollees.  Approximately 55 percent of enrollees are working individuals, 17 percent are sole proprietors, and 28 percent are enrolled through small-groups.

    Qualifying small employers, sole proprietors, and individuals are eligible for the program provided they have not been insured in the past 12 months or lost their insurance due to a qualifying event.  Small employers may buy into the program if they have less than 50 employees, 30 percent of whom earn less than $35,500 annually (adjusted annually for inflation).  Employers must contribute at least half of the premium, and at least 50 percent of employees must participate in the program or have coverage through other sources.

    Starting in January 2007, HealthyNY began offering a high deductible health plan option that is designed to be compatible with health savings accounts.

    To learn more about the Healthy New York program, read SCI’s Profile in Coverage.


Group Purchasing Arrangements

  • HealthPass allows small businesses (2-50 employees), with an active address in the New York City area, to provide a choice of over 25 health insurance options offered by 6 carriers to their employees.  The employer determines their level of contribution and 75 percent of eligible employees must join HealthPass. 

    LIA Health Alliance is health purchasing cooperative that allows small businesses (2-50 employees) and sole proprietors, located in the greater New York City area, to offer employees to select health insurance from 5 carriers. 

State Specific Strategies

  • In August 2007, the state approved the budget for an expansion of Child Health Plus (CHPlus) to children in families with incomes up to 400 percent of the federal poverty level (FPL) - the previous eligibility level was 250 percent FPL.  Federal matching funds for the CHPlus expansion was denied by CMS on the basis of the “August 17 directive,” which stated that the federal government would not provide matching funds for expanding coverage to children unless certain criteria were met.  New York was deemed out of compliance.  In April, 2008 the New York governor signed legislation to expand CHPlus up to 400 percent of FPL using state funds.  That expansion took effect September 1, 2008.  Children receive free coverage up to 160 percent of FPL, then there are monthly premiums assessed on a sliding scale basis up to 400 percent of FPL. Families with incomes higher than 400 percent can then buy into the program at full cost.