EXPANDED HEALTH CARE COVERAGE ACT
                    OF NINETEEN HUNDRED EIGHTY-EIGHT
 
Section 1. Legislative findings.
        2. Short title.
        3. Definitions.
        4. Regional pilot projects for the uninsured.
 
  Section  1. Legislative findings. The legislature finds that there are
more than two and one-half million residents of the state  who  have  no
health  care  coverage.  The  legislature recognizes that since nineteen
hundred eighty  the  number  of  state  residents  without  health  care
coverage  has  increased  at a rate of one hundred thousand per year, an
increase of more than thirty percent in six years.
  The legislature further finds that people without health care coverage
have limited access to primary health care services and  tend  to  defer
obtaining medical care, which leads to increased severity of illness and
increased  costs  when services are utilized. The legislature recognizes
that the lack of health care coverage has serious implications  for  the
overall health status of residents of the state.
  The  legislature  recognizes  the need to develop methods of providing
health care coverage to uninsured individuals and families in  order  to
improve  the health of residents of New York. Therefore, the legislature
hereby declares that it is the policy  of  this  state  to  promote  the
establishment  of pilot programs to test effective mechanisms to provide
health care coverage to the uninsured. The legislature further  declares
that   these  pilot  programs  will  provide  valuable  information  for
determining  future  methods  of  providing  comprehensive  health  care
coverage to all New York residents who lack such coverage.
    2.  Short  title.  This  act shall be known and may be cited as the
"Expanded Health Care Coverage Act of Nineteen Hundred Eighty-eight".
   3. Definitions. For the purpose of  this  act,  unless  the  context
clearly requires otherwise:
  1. "Applicant" means an eligible organization which submits a proposal
under subdivision five of section four of this act.
  2.  "Approved organization" means an eligible organization approved by
the commissioner to conduct either an individual subsidy program  or  an
employer  incentive  program,  under subdivision five of section four of
this act.
  3. "Commissioner" means the commissioner of health.
  4. "Eligible organization" means an organization submitting a proposal
to the commissioner under subdivision five of section four of this  act.
The  organizations which may submit a proposal shall include, but not be
limited to, the following:  (i) a commercial insurer;  (ii) a corporation or health maintenance organization  licensed  under
article forty-three of the insurance law;  (iii)  a  health  maintenance  organization  certified  under  article
forty-four of the public health law;  (iv) a comprehensive health services plan operating under  regulations
of the department of social services or the department of health;  (v) an employer association; or  (vi) a local social services district.
  5.  "Employer  incentive  program" means a pilot program which assists
employers in providing health care coverage under subdivision  three  of
section four of this act.

  6. "Incentive payment" means payments made to an approved organization
to  reduce the cost of providing health care coverage under the employer
incentive program.
  7.  "Individual  subsidy  program"  means  a pilot program which shall
assist individuals and families in purchasing health care coverage under
subdivision two of section four of this act.
  8. "Regional pilot project" means a program to test a model  providing
health  care  coverage under insurance or equivalent coverage mechanisms
for  the  uninsured  and  to  test  negotiated  special   payment   rate
methodologies for inpatient and outpatient services delivered by general
hospitals.
  9.   "Subcommittee"   means   the  subcommittee  on  health  insurance
established pursuant to chapter one hundred twenty-six of  the  laws  of
nineteen hundred eighty-one.
  10. "Subsidy payment" means a payment made to an approved organization
to  reduce  the  cost  of  purchasing  health  care  coverage  under the
individual subsidy program.
  11. "Superintendent" means the superintendent of financial services.
   4. Regional pilot projects for the uninsured. 1.  The  commissioner,
in consultation with the subcommittee, is authorized to conduct regional
pilot  projects,  including  one or more individual subsidy programs and
one or more employer incentive programs. The commissioner shall  approve
at least one of each program in accordance with subdivision five of this
section. In the absence of applications which meet the approval criteria
for  any  one model, the commissioner may approve additional programs in
the other program category.
  2. (a) An individual subsidy  program  shall  assist  individuals  and
families   in   purchasing  health  care  coverage  under  insurance  or
equivalent  coverage  mechanisms.  In   order   to   be   eligible   for
participation  in  the program, and subject to annual recertification of
eligibility, individuals and families shall meet the following criteria:  (i) gross household income is at or below two hundred percent  of  the
non-farm federal poverty level; and  (ii)  not  receiving  medical  assistance  without taking into account
costs incurred for medical care under the provisions  of  section  three
hundred sixty-six of the social services law; and  (iii)  ineligible  for  medicare as defined in subchapter XVIII of the
federal Social Security Act, 42 U.S.C. 1395 et seq., and  (iv) do not have equivalent health care coverage  under  insurance  or
equivalent  coverage  mechanisms  as  defined  by  the  commissioner, in
consultation with the superintendent. Individuals  and  families  having
health  care  coverage  within the six month period prior to application
shall not be eligible for the individual subsidy program. The limitation
shall not apply to persons who become ineligible for medical  assistance
or  whose  insurance or equivalent coverage is terminated as a result of
loss of employment within such period.  (b)  If  individuals  and  families  receiving  benefits   under   the
individual  subsidy  program  become  eligible for medical assistance by
taking into account costs incurred for  medical  care,  social  services
districts  may  pay  all  or  part  of  the  premium  in accordance with
department of social services  regulations.  For  the  purpose  of  this
paragraph, subsidy payments shall not be available to cover the costs of
the premium.  (c)  For  the  purposes  of  the  individual  subsidy program, subsidy
payments shall be made, under subdivision eight of this section,  to  an
approved  organization  for  the  purpose  of reducing premium payments,
deductibles  or  copayments  for  participants  in  the   program.   The
commissioner  may  establish and adjust schedules of payments to be made

under this program. In determining such schedules, the costs to be borne
by the individual or family shall take into account the  household  size
and  gross  annual income of the household and such other factors as the
commissioner may deem appropriate.  (d)   Notwithstanding   the   provisions  of  paragraph  (a)  of  this
subdivision, an individual who meets  the  criteria  as  established  in
subparagraphs (ii) through (iv) of such paragraph may be enrolled in the
individual   subsidy   program,   provided  however,  that  an  approved
organization shall not be eligible to  receive  a  subsidy  payment  for
providing coverage to such an individual. Enrollment of such individuals
shall  not  exceed  twenty-five  percent  of  the  total  enrollment for
participants in the individual subsidy program.  (e) Applications for enrollment in the individual subsidy program will
not be accepted on and after January first, two thousand one;  provided,
however,  individuals and families who are otherwise eligible to receive
benefits under such program and are enrolled prior to January first, two
thousand  one,  may  remain  enrolled  in  such  program   until   March
thirty-first, two thousand nine.
  3.  (a) An employer incentive program shall assist employers of twenty
or fewer employees in purchasing health care coverage for all  full-time
employees  and  such other employees determined to be qualified for such
coverage by the  employer  based  on  employment  status.  In  order  to
participate  in  the program, an employer shall not have, within the six
month period prior  to  application,  provided  employer-financed  group
health  care  coverage  to  any  employee associated with the employer's
business.  (b) An employer incentive payment shall  consist  of  payments  to  an
approved organization in the amount of no more than fifty percent of the
premium  costs  for  group  health care coverage for employees and their
dependents. Employees shall not be required to make contributions to the
payment of premium costs under this program. Premium costs  incurred  by
an  employer  for  group  health  insurance  coverage  for  officers and
directors of an employer and others  with  a  proprietary  or  ownership
interest  in  the  employer  may be eligible for an incentive payment to
offset premium costs; provided, however, that the gross household income
of such officers and directors or others with a propriety  or  ownership
interest  does  not  exceed the limits provided pursuant to subparagraph
(i) of paragraph (a) of subdivision two of  this  section  and  provided
further  that  one or more employees and their dependents proposed to be
covered by such  group  health  care  coverage  are  unrelated  to  such
officers,  directors  or  other  persons  with  a propriety or ownership
interest. If an employer participating in an employer incentive  program
hires more than twenty employees after joining the program, the employer
may  continue  in  the program but the premium costs attributable to the
additional employees  or  their  families  shall  not  be  eligible  for
incentive payments.  (c) Employers may be approved to participate in the program based upon
the  average  salaries  of  the employees who are to receive health care
coverage, with those employers with the lowest average employee salaries
to  be  selected  first  and  other  employers  to   be   eligible   for
participation as funding will allow.  (d)  Notwithstanding the provisions of this subdivision, if the number
of employers who meet the criteria established in paragraph (a) of  this
subdivision,  and  who  are  applying  for participation in the employer
subsidy program, exceeds the amount of funds available  to  an  approved
organization  to  provide  health  care  coverage to employers under the
program, the approved organization may enroll additional employers.  The
approved  organization  shall  not  receive  incentive payments for such

employers. Enrollment of such employers  shall  not  exceed  twenty-five
percent  of  the  total  enrollment  of  employers  and their dependents
participating in the employer incentive program.  (e)  Employer  incentive programs established pursuant to this section
shall expire upon implementation of the New York  state  small  business
health  insurance  partnership program in accordance with the provisions
of article 9-A of the public health law.
  4. The commissioner shall establish guidelines for the  submission  of
proposals  by eligible organizations, including, but not limited to, the
following components:  (i) standards for premiums, copayments and deductibles which  consider
the needs of program participants in obtaining health care;  (ii)  insurance or equivalent coverage mechanisms to be utilized under
the project;  (iii) minimum standards for benefits under  the  requirements  of  the
insurance law and such additional benefits as may be identified;  (iv) health care provider payment methodologies;  (v)  appropriate  utilization review and quality assurance mechanisms;
and  (vi) such other criteria which may be deemed necessary.
  5. (a) A proposal submitted by an eligible organization shall meet the
following criteria:  (i) estimate the number of participants who would be eligible for  the
program  and  the estimated number of actual participants in the program
location;  (ii) designate the geographic area to be served by the program;  (iii) assure access to  and  delivery  of  high  quality,  appropriate
medical  services  and  include  a  network  of health care providers in
sufficient numbers and  geographically  accessible  to  service  program
participants;  (iv) describe the procedures for marketing and determining eligibility
for the health care coverage plan in the program location, including the
designation  of  other  entities  which may perform such functions under
contract with the organization;  (v) describe any arrangements  for  negotiated  special  payment  rate
methodologies for inpatient and outpatient services;  (vi) describe in detail the estimated expenses, including the proposed
use of subsidy or incentive payments, personnel costs and other types of
administrative  expenses  which  will be incurred in the development and
implementation of the program;  (vii) describe the quality assurance mechanisms and utilization review
mechanisms to be implemented;  (viii) demonstrate that the applicant has sought public  participation
and local involvement in the development of the program plan;  (ix) demonstrate the applicant's ability to meet the data analysis and
reporting requirements for program evaluation;  (x)  describe  the  extent  to  which the program may be replicated in
other geographic areas or on a statewide basis;  (xi) describe the benefit package to be offered in the program and the
cost of such benefit package;  (xii) comply with or demonstrate an acceptable arrangement or contract
with an organization which can meet the requirements of  section  eleven
hundred eighteen and other applicable provisions of the insurance law;  (xiii) demonstrate the financial feasibility of the program;  (xiv)  describe  the premium, copayments and deductibles to be paid by
program participants; and  (xv)  include  any  other  information  the   commissioner   and   the
superintendent shall deem appropriate.  (b)  The  commissioner, within forty-five days of receiving a proposal
from an eligible entity, shall make a determination whether to  approve,
disapprove  or  recommend  modification  of the proposal. In order for a
proposal to be approved by the commissioner, the proposal must  also  be
approved  by  the  superintendent  with  respect  to  the  provisions of
subparagraphs (xii) through (xiv) of paragraph (a) of this  subdivision.
Upon  receiving a proposal, the commissioner shall provide a copy of the
proposal  to  the  chairman  of  the  subcommittee,  consult  with   the
subcommittee   and  receive  its  recommendation  with  regard  to  such
application.
  6. The  commissioner,  in  consultation  with  the  subcommittee,  may
approve  a  supplemental  grant  program,  in addition to those programs
authorized under subdivision five of this section, to provide grants for
public  education,  outreach  and  marketing  of  health  care  coverage
targeted  at  uninsured  individuals  and  families  and  employers  not
providing coverage to their employees in any geographic  area  which  is
not  designated for regional pilot project implementation. Grants may be
used for the following:  (i) public  education  concerning  the  availability  of  health  care
coverage;  (ii)  promotion  of community awareness of the benefits of health care
coverage; and  (iii) outreach and direct recruitment of potential enrollees.
  7. The commissioner is authorized  to  approve  contracts  between  an
approved  organization  and  any  other  organization  for  the purposes
including, but not  limited  to,  outreach,  marketing  and  eligibility
determination.
  8.  The  commissioner  shall  determine  the  amount  of  funds  to be
allocated to an approved organization  for  the  purposes  described  in
subdivision  one  of  this  section from any funds available pursuant to
subparagraph (i) of paragraph (f) of  subdivision  nineteen  of  section
twenty-eight hundred seven-c of the public health law.
  8-a.  The  commissioner,  in consultation with the superintendent, may
adjust subsidy payments and incentive payments for approved programs for
any of the following circumstances: (a) for new programs;  (b)  for  new
coverage  under  existing  programs; and (c) to be effective on the next
annual renewal date of the affected coverage for existing coverage.
  9. Notwithstanding the provisions of paragraph (c) of subdivision  two
of  section two thousand eight hundred seven-c of the public health law,
approved organizations may enter into agreements for negotiated  payment
rate  methodologies  with general hospitals for inpatient and outpatient
hospital services. Such negotiated payment  rate  methodologies  in  the
case  of  inpatient  services or outpatient services shall be subject to
the approval of the commissioner, and shall not adversely affect quality
of care outcomes or  result  in  the  shifting  of  costs  of  providing
services to beneficiaries of a program to any other payor.
  10.  An approved organization shall submit reports to the commissioner
in such form and at times as may be required in order  to  evaluate  the
operations and results of such program.
  11.  The  commissioner,  in  consultation with the subcommittee, shall
enter  into  agreements  with  one  or  more   persons,   not-for-profit
corporations,  or  other  organizations,  other  than  a state employee,
official or agency, for the performance of a comprehensive evaluation of
the implementation and effectiveness  of  the  regional  pilot  projects
authorized  pursuant  to  this  act. The evaluation shall assess factors
including, but not limited to:  (i) the overall effect of the regional pilot projects on access to and
utilization of health care services;  (ii) the impact of the regional pilot projects on the health status of
program participants;  (iii)   the   impact  of  using  a  negotiated  special  payment  rate
methodology on  access  to  and  quality  of  inpatient  and  outpatient
services  delivered  by general hospitals and on the functioning of such
hospitals;  (iv) the impact of using alternative insurance, financing, health care
delivery and provider  payment  models  on  the  costs  of  health  care
coverage;  (v)  the  impact  of  the  regional pilot projects on the bad debt and
charity care system and on other insurers, employment  and  health  care
delivery systems in the regional pilot project location;  (vi)  the feasibility and appropriateness of implementing the regional
pilot projects in other locations and on a statewide basis; and  (vii) the impact on the regional pilot projects of any  adjustment  of
subsidy payments or incentive payments.
  An  evaluation required pursuant to this section shall be submitted to
the governor and the legislature by April 1, 1995.
  12. Notwithstanding any inconsistent provision of section 112  or  163
of  the  state  finance  law  or any other law, at the discretion of the
commissioner without a competitive bid or request for proposal  process,
contractual  arrangements  with approved organizations in effect in 1993
may be extended through December 31, 1999 to  provide  an  uninterrupted
continuation of services and may be amended as may be necessary.