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July/Aug 2007

New State Updates

New York: This month Governor Eliott Spitzer (D) signed into law S06344, which allows employers to buy into Family Health Plus, a state health plan for uninsured adults. Currently, the Family Health Plus insurance program is only available to New Yorkers who earn too much to qualify for Medicaid, but who must meet other income eligibility requirements (up to 150 percent of the federal poverty level [FPL] for parents and up to 100 percent FPL for childless adults) and who lack other coverage options.

The purpose of this bill is to increase New Yorkers’ access to affordable health insurance by leveraging employer contributions. Additionally, the state will contribute toward the cost of premiums for eligible employees, thereby making it easier for employers to offer health care coverage without making businesses uncompetitive.

The bill allows employers and Taft-Hartley funds to buy into Family Health Plus as long as they pay at least 70 percent of the premiums for their employees. The state will then pay the remainder of the cost for individuals eligible for Family Health Plus. Otherwise, employees are responsible for the balance of the premium.

: Governor Ted Kulongoski (D) signed Senate Bill 329 in June. Called the Healthy Oregon Act, SB 329 provides a detailed timeline for developing a full-scale health reform plan to be passed by the 2009 legislature. The bill establishes the Oregon Health Fund Board, which is responsible for developing the comprehensive reform and implementation plan. Five subcommittees will make recommendations to the Board on financing, delivery system reform, benefit definition, eligibility and enrollment, and federal policy issues and opportunities. In addition, existing state commissions and committees are charged with compiling data and conducting research to inform the decision-making of the subcommittees:

  • The Oregon Health Policy Commission will work on the financing mechanism for the plan;
  • The Office for Oregon Health Policy and Research will report on the health care delivery model of the plan;
  • The Health Services Commission will develop methodology for establishing the defined set of essential health services under the plan; and
  • The Medicaid Advisory Committee will recommend eligibility and enrollment requirements under the plan.

These state commissions and committees are to report their findings to the subcommittees by February 1, 2008. Through a public meeting process, stakeholders across the state will review the subcommittee recommendations and provide input. The finalized plan will be presented to the Governor and legislature by October 1, 2008 for introduction in the 2009 legislative session.

: On June 27, Governor John Baldacci (D) signed into law LD 431, a bill allowing the DirigoChoice program to be self-administered.

DirigoChoice, the centerpiece of Maine health reform, is offered to small businesses, the self-employed, and eligible individuals without access to employer-sponsored insurance. Currently available exclusively through Anthem Blue Cross Blue Shield, the program offers discounts on monthly premiums and reductions in deductibles and out-of-pocket maximums on a sliding scale to enrollees with incomes below 300 percent of the federal poverty level.

With the new legislation, the DirigoChoice program can now self-insure. According to the bill’s fiscal note, converting to a self-administered plan could result in any of the following:

  • The General Fund losing insurance premium tax revenue of approximately $1.8 to $2 million per year annualized (based on Dirigo 2008-2009 proposed budget premium assumptions) if a conversion takes place. This loss may be partially offset by a minor increase (less than $50,000) in corporate income tax revenue paid by the third-party administrator Dirigo may use to administer the plan.
  • A net savings to the Dirigo Health program of approximately $3.9 million per year on an annualized basis, mainly from savings in administrative costs, greater plan design flexibility, and not having to pay the insurance premium tax.