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Health Care Reform Act of 2000 (HCRA 2000)

Summary

HCRA 2000 continues the negotiated rate-setting system which began January 1, 1997. The new expiration date for HCRA is June 30, 2003. Most of the surcharges continue including the 8.18% surcharge and the covered lives assessment. Notable changes include elimination of the 8.18% surcharge on freestanding and hospital outpatient laboratories and a $60 million reduction in covered lives assessment when fully phased-in.

There are also two new funding sources: a significant portion of the state's tobacco settlement and a $.55 increase in the tax on cigarettes.

Key Details

1.) Effective January 1, 2000 - June 30, 2003.

2.) Bad Debt / Charity Care

3.) Covered Lives Assessment

4.) Family Health Plus

5.) Healthy New York Group (small business subsidy program)

6.) Workforce retraining

7.) Quality Task Force

Appendix A
Healthy New York Group
(small business subsidy program)

HCRA 2000 creates a new standardized health insurance subsidy program for small businesses.

1.) Eligibility

  • an employer with fifty or fewer employees;
  • has not provided health insurance in the past 12 months;
  • at least 30% of the workers make less than $30,000.

2.) Benefits

  • inpatient hospital services consisting of daily room and board, general nursing care, special diets and miscellaneous hospital services and supplies;
  • outpatient hospital services consisting of diagnostic and treatment services;
  • physician services consisting of diagnostic and treatment services, consultant and referral services, surgical services (including breast reconstruction surgery after a mastectomy), anesthesia services, second surgical opinion, and a second opinion for cancer treatment;
  • outpatient surgical facility charges related to a covered surgical procedure;
  • preadmission testing;
  • maternity care;
  • adult preventive health services consisting of mammography screening; cervical cytology screening; periodic physical examinations no more than once every three years; and adult immunizations;
  • equipment, supplies and self-management education for the treatment of diabetes;
  • diagnostic x-ray and laboratory services;
  • emergency services;
  • therapeutic services consisting of radiologic services, chemotherapy and hemodialysis;
  • blood and blood products furnished in connection with surgery or inpatient hospital services; and
  • prescription drugs obtained at a participating pharmacy.

3.) Where is the insurance obtained?

  • All HMO's will be mandated to offer this new standardized plan to small business.

4.) Special features

  • The benefits will be subject to deductibles and co-pays:
      • $500 inpatient hospital
      • lesser of 20% or $200 for surgical service
      • $75 outpatient surgery
      • $50 emergency rooms
  • Prescription drugs:
      • $10 co-pay for generic
      • $20 co-pay for brand name
      • $3000 maximum per individual in a calendar year
  • Stop-loss coverage:
      • the HMO will be responsible for claims under $30,000 and over $100,000. The state would pay claims between $30,000 and $100,000 from money from the tobacco settlement and cigarette tax hike.

5.) Employer contribution

  • The small business must cover at least 50% of the premium for individuals making less than $30,000.

6.) A report shall be submitted to the legislature by 01-01-2002 including an examination of employer participation, an income profile of covered employees and qualifying individuals, claims experience, and the impact of the program on the uninsured population.

Appendix B
The Numbers
(small business subsidy program)

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REVENUES  2000 2001 2002 2003 (6 mo. of year)
55 cent cigarette tax 394 445 428 207
Tobacco settlement 276 305 383 360
8.18% surcharge 738 738 738 383
Covered lives assessment 544 524 504 292
8.8% freestanding labs (effective 10-01-2000) (9)(35) (35) (18)
8.18% on hospital labs (effective 10-01-2000) (5) (19) (19) (10)

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Spending

2000 2001 2002 2003
Bad Debt/Charity Care 8.18% surcharge, 1.0% surcharge on hospitals revenue and some tobacco money 765 765 765 383
Graduate Medical Education 494 494 494 247
Child Health Plus 207 235 324 174
Family Health Plus
     * Adults with kids 7 27 57 43
     * Adults without kids  0 33  66 44
Small business subsidy 034 77 52
Individual subsidy 0 6 29 21


Spending 2000 2001 2002 2003
Continuation of old HCRA plans (grandfather people already in
      * NYSHIP (small business) 6 5 4 1
      * Individual plan 6 5 4 1
Subsidies for direct pay subscribers 35 36 39 20
Workforce retraining 30 40 50 30
BD/CC Compliance Audits 6 6 6 3
Transfer to general fund 82 82 82 41

Please note that this chart does not include all spending programs. Numerous other general fund programs have been transferred to HCRA money, including mental health, elderly pharmaceutical drugs, poison control, etc.