The Health Care Reform Act 2000 (HCRA 2000) includes several new initiatives that will extend affordable health insurance coverage to up to 1 million people -- the largest expansion of coverage in New York since the creation of Medicare and Medicaid over 30 years ago. The insurance expansion is funded by proceeds from a 55¢ per pack cigarette tax increase and Federal matching contributions, which will total $1.2 billion over three and a half years.

Family Health Plus: The largest of the new initiatives is Family Health Plus (FHP), a program that builds on the foundation that Child Health Plus provides, extending fully subsidized coverage to working parents and single adults. FHP is modeled on a proposal originally put forward by a coalition that includes GNYHA, 1199/SEIU, and the New York State Health Care Campaign. The new FHP program will allow parents with incomes under 150% of the poverty level ($25,575 for a family of four) and childless adults with incomes under 100% of poverty ($8,350 for an individual) to obtain fully subsidized, comprehensive health insurance. When fully implemented in 2003, FHP is expected to cost roughly $700 million per year and make coverage available to up to 600,000 New Yorkers.

Healthy New York: HCRA 2000 also creates the Healthy New York program, which would make subsidized health insurance with limited benefits available to small businesses and individual workers. Businesses with up to 50 employees will be able to purchase coverage through this program if they have not offered employer-sponsored coverage in the past year and at least one-third of their workforce earns under $30,000 per year. Sole proprietors and individuals who have been uninsured for at least one year and work for firms that do not provide coverage may also participate in the program if their incomes do not exceed 208% of the poverty level ($35,500 for a family of four). Healthy New York policies will cover basic services like inpatient hospital care and physician services, but copayments for most services will be substantial and certain benefits like home health care and inpatient mental health services will not be covered. A State-funded stop-loss fund for high claims will further reduce premiums for this coverage.

Direct-Pay Market: To soften premium increases for individuals who buy coverage on their own in the direct-pay market, a State-financed stop-loss fund will reimburse insurers for high-cost claims. Stop-loss funds will be allocated equally between HMO and point-of-service plans. The program will be funded at $40 million per year when it is fully implemented in 2003.