New York state’s Healthy New York program has helped thousands of small businesses offer health insurance to their employees, something many of there were not able to afford before. Michelle Sheffer, who owns A Child’s World, a day care service in Queensbury, N.Y., was not able to offer her employees health insurance coverage before 2005, when the state’s Office of Family Services and Children began paying a portion for day care providers. Now, Sheffer has been able to retain her workers longer because of the program.
"One major reason it’s been hard to keep people is that you don’t have benefits," she said. "It’s helped me keep people a little big longer. There’s no other way to get (benefits) that cheap on your own."
A Child’s World has 12 employees, and three of them are using the Healthy New York program, which provides highly discounted, scaled-down insurance coverage for qualifying small businesses, sole proprietors and operators, and employees who do not have benefits.
Sheffer’s family uses the Healthy New York insurance coverage. Her husband owns his own business, and the family previously used that company’s insurance plan. Family coverage premiums under that plan were about $700 per month, and by using the Healthy New York program, the Sheffer family has been able to reduce their premiums to $370 per month.
The Healthy New York (HNY) program currently insures about 117,000 New York state residents who work for small businesses with less than 50 employees, are sole proprietors or are individuals who don’t have work-provided insurance.
To qualify, businesses must not have offered their employees health insurance for at least the previous 12 months. And they must pay at least 30 percent of their employees $34,000 per year or less.
For small businesses that qualify, HNY offers insurance that can save them up to 30 percent from the cost of open-market health insurance, said Andrew N. Mais, who works in public affairs and research with the State of New York Insurance Department.
"Compared with other comprehensive insurance available to individuals, it’s less than half the premium," he said. "Using the cheapest premium rates in Albany County, the premium for HNY is as low as $138. The lowest premium for regular individual coverage is $476."
While the lower rates help entice more small businesses to offer employees insurance through lower rates, HNY offers a reduced benefit package. It does not include benefits such as physical therapy, chiropractic, home health, ambulance trips and mental health. Drug coverage is limited with the program, Mais said.
However, basic care such as inpatient and outpatient hospital services, physician visits, maternity care, preventative health, diagnostic screening and X-ray, and emergency care are covered with the HNY program.
The program also uses cost-sharing through co-pays and deductibles, and limits services to in-network only. It is sold by HMOs, which rely on managing the care of members to save costs.
HNY uses reinsurance. The state reimburses health plans for 90 percent of costs that fall within $5,000 to $75,000 in a calendar year, reducing the risk placed on the insurer.
The stop-loss is funded through state dollars from New York state’s tobacco settlement fund, Mais said. For 2006, HNY was allocated $109.6 million. The program estimates it will actually use about $71 million.
For 2005, the program was allocated $69.2 million and used $61.7 million.
Since its creation in 2001, the program has reached more than 250,000 people. This year, it has averaged about 7,300 new enrollments each month.
The program was started in 2001, as part of Republican Gov. George Pataki’s Health Care Reform Act of 2000, designed to reduce the number of New York state residents without insurance.
"Gov. Pataki tried to create a business-friendly environment and one where we make sure health care is affordable for everyone," Mais said. "He also wanted to reduce (employee) turnover, which is good for business, above and beyond the straight insurance benefit."
In 2004, there were about 2.8 million residents of New York state without health insurance, according to the U.S. Census Bureau’s Current Population Survey, Mais said. That is the most recent year records available.
The state’s number of uninsured residents was about 17 percent of its population in 1996, and decreased to 14.2 percent in 2004.
The U.S. average of uninsured residents was 15.7 percent in 2004.
HNY has specifically targeted the child care industry by offering assistance funding to increase the number of day care centers offering health coverage for their workers. This segment of workers has traditionally been underserved, Mais said.
"This experiment has served to bring coverage to the uninsured while encouraging greater caregiver continuity for New York’s children," he said. "While this experiment has been a small one, we think this industry-based approach to reaching the distinct needs of certain traditionally uninsured or underinsured populations holds merit."
Editorial Note:
For more information on the Healthy New York program,
visit: www.healthyny.com.
