United Hospital Fund Report Finds Tools to Address Affordability Challenges from Temporary Health Insurance Program

Release Date: 06.30.2016

A new United Hospital Fund report examines New York’s little-known Advanced Premium Tax Credit Premium Program (APTC-PP), a temporary program that made health insurance exchange coverage more affordable for thousands of low-income parents during a transition between the phase-out of the Family Health Plus program in 2014 and the implementation of the new Basic Health Program in 2016. The report provides financial and enrollment data on the program, and highlights lessons learned should policymakers consider a more enduring premium subsidy program to address health insurance affordability challenges.

According to the report New York's Temporary Premium Subsidies: Meeting Immediate Goals and Yielding Useful Lessons, the APTC-PP was adopted in March 2013 as part of an extensive set of amendments needed to implement the Affordable Care Act and authorized state premium subsidies to supplement federal payments to plans to keep monthly premiums at $0 for parents shifted from Family Health Plus to qualified health plans. For a hypothetical Brooklyn couple cited in the report, the APTC-PP provided a monthly $231 premium subsidy on top of the $512 federal subsidy. Since the APTC-PP did not subsidize cost sharing required for qualified health plans, however, enrollees faced slightly higher out-of-pocket costs compared to Family Health Plus.

State officials’ preliminary estimates of the costs of the monthly premium subsidies provided through the APTC-PP indicate total expenditures of $36.8 million (covering 2014, 2015, and 2016). Monthly enrollment in the program grew from 2,000 in its first month to nearly 19,000 by October 2015.

“The APTC-PP was a creative approach, conceived and implemented within months of its authorization, that allowed New York to access significant new federal funding available under the ACA, but at the same time limited the hardships low-income parents would face during a transition period,” said lead author Peter Newell, director of UHF’s Health Insurance Project. “New York’s experience also underscores important new tools that New York gained as a result of the ACA, and some of the considerations for future subsidy programs, including scale, steps that would need to be taken to subsidize cost sharing for enrollees, and federal willingness to partner.”

“The Affordable Care Act is more than just a major revision of our individual and small group insurance markets,” said Jim Tallon, president of United Hospital Fund. “For states like New York that have taken a more active role in the pursuit of expanded insurance coverage, there’s much to learn even from some of the law’s lesser-known components.”

New York's Temporary Premium Subsidies: Meeting Immediate Goals and Yielding Useful Lessons is the fourth in a series of snapshot reports highlighting specific issues related to the Affordable Care Act, as a complement to the forthcoming Big Picture chartbook on health plan enrollment and financial results in New York’s private and public insurance markets. Written by Peter Newell and Nikhita Thaper, research assistant, the report is available from UHF’s website at https://www.uhfnyc.org/publications/881140.

Support for this work was provided by the New York Community Trust.

About United Hospital Fund: United Hospital Fund works to build a more effective health care system for every New Yorker. An independent, nonprofit organization, we analyze public policy to inform decision-makers, find common ground among diverse stakeholders, and develop and support innovative programs that improve the quality, accessibility, affordability, and experience of patient care.

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