New York to Receive Federal Approval for Family Health Plus Medicaid Expansion

After a delay of more than a year, Secretary Tommy G. Thompson announcedon May 30 that the Department of Health and Human Services has approved a Medicaid waiver that will expand coverage under New York's Family Health Plus to an estimated 352,000 uninsured parents with income up to 150 percent of the federal poverty level, or an annual income of $25,000 for a family of four. Another 267,000 individuals without children who earn annual incomes below 100% FPL, or $8,590 per person per year, also are now eligible for coverage (HHS release, 5/30). The New York Times reports that in 1999, Gov. George Pataki (R) signed a law creating Family Health Plus, which will provide "virtually free insurance" through managed care to income-eligible adults who do not otherwise qualify for Medicaid. The program was scheduled to begin in January, but both the Clinton and Bush administrations withheld approval of the waiver due to concerns that the program would cost more than originally expected. The Times, citing "state and federal officials involved in the negotiations," reports that "[i]n the end, the federal officials agreed with the state's contention that the program ... would not cost the federal government any more than the state had estimated" -- a total program cost of $1.1 billion over three and a half years, with the federal government paying roughly half. Expected enrollment is 600,000 people. The Times adds, however, that "no one can guarantee" that the program costs will not increase in later years. Family Health Plus is scheduled to begin enrolling eligible individual into managed care plans in September; between now and then, federal auditors will review the managed care companies hired by the state to cover the participants. While the state "says it is confident that the managed care programs will be able to handle the influx of new patients," adding that many of the companies are already participating in other government-sponsored programs, some Democrats and advocates for the poor "have sharply questioned whether those managed care plans indeed have the capacity to handle the hundreds of thousands of Medicaid recipients that the state has [already] been steering their way."

'Political Victory'
According to the Times, the program's approval signifies a "significant political victory" for Pataki, who had been a "strong supporter" of President Bush during his presidential bid but had "little to show for his efforts." Pataki, the Times reports, had "staked much of his political reputation" on being able to convince the Bush administration to approve Family Health Plus, after having been "snubbed" by former President Clinton. In an interview, Pataki said that he thought the Bush administration was more receptive to the plan than Clinton's because both Bush and HHS Secretary Tommy Thompson are former governors who favor allowing states to have control over social programs. "This is really big," Pataki said (Hernandez, New York Times, 5/30).