News Analysis: Pataki Winning Wider Health Care, a Step at a Time

Senator Clinton has frequently said that the most important lesson she learned from her failed efforts to secure universal health insurance during her husband's tenure as president was that health care reform had to come one step at a time. In winning approval this week from the federal government to offer a new health insurance program for the working poor, New York became the only state in the country trying that approach.

The new plan, called Family Health Plus, will provide free health insurance for those families earning up to 150 percent of the federal poverty level, too much to qualify for Medicaid, and single adults who earn up to 100 percent of that level. This is the first time a state has extended such a government insurance program to adults without children. This program joins the state's Child Health Plus plan, one of the country's most successful insurance programs for poor children, as well as a relatively generous Medicaid program. The state is also offering a program of subsidized insurance for small-business owners.

"This could truly be the most important health care program in America," said Tommy G. Thompson, the secretary of health and human services, who as governor of Wisconsin oversaw a large expansion in insurance coverage for the working poor. Mr. Thompson appeared at a news conference yesterday with Governor Pataki to announce the new program, which is expected to cover 619,000 New Yorkers and cost $1.1 billion over the next three and a half years. Half of it will be federally financed, while the state and localities will each pay for 25 percent of the program.

The acceptance of this new plan marks a significant shift in Governor Pataki's thinking from years ago about how the uninsured should gain coverage, bringing the onus back on the government at a time of skyrocketing health care costs. A plan just like Family Health Plus was the cornerstone of Mrs. Clinton's health care plan when she was running for the Senate.

These new entitlements may open the door for more people to qualify for government coverage in the future, because the amount of money families can earn while receiving Family Health Plus will rise each year for two years. Some health care policy experts say that one day, working-class residents may be able to buy into the state's program at low-rate premiums. 

It would seem that Medicaid, not so long ago the vilified health plan of last resort, has become the preferred health plan of many flavors for a broad swath of the state's poor. "We are rethinking the fundamental rules of Medicaid," said James R. Tallon, president of the United Hospital Fund, a philanthropy group. 

Even with all of these programs, New York is still far from offering universal coverage to its residents. Family Health Plus, which is expected to begin enrolling beneficiaries in September, excludes immigrants, even many legal ones, and many working uninsured people will still make too much money to qualify for the plan. To be eligible for the new plan, a family of four could have an income up to $25,000 a year.

But New York, which has roughly 3.1 million people without insurance, will surely be a model for other states looking for ways to reduce the ranks of the uninsured. Even so, the state will be stuck with the unenviable task of showing the rest of the country how to make these programs work once they finally come into being. 

As it turns out, finding and financing government programs to cover people's health care costs is only half the battle. Another sizable challenge is getting people enrolled in the programs and keeping them there. "Family Health Plus brings the benefits of a new insurance program, but all the complications, too," Mr. Tallon said. "There are the continuing issues of getting people adequately enrolled.'

New York State has already enrolled about 530,000 children in its insurance plan for poor children. The success of that program bodes well for Family Health Plus because health care policy experts believe that many of the parents of children enrolled in their program are potential beneficiaries of Family Health Plus.

But Child Health Plus has had growing pains: hundreds of thousands of children enrolled in both it and Medicaid end up uncovered for some period because their parents do not follow through with the required process to renew these benefits annually, a process known as recertification.

Beneficiaries, as in the state's general Medicaid program, must report for a face-to-face interview with a stack of financial documents to prove that they are still needy. Many do not bother to follow through; at other times the process gets so snarled that people lose benefits temporarily. Health plans report losing as much as half of their enrollees to this process.

Further, few commercial managed care plans participate in these various Medicaid programs, especially in New York City. Of the roughly 30 plans that do participate in these various Medicaid plans, many are run by health care providers like hospitals or clinics, limiting possible choices. 

No one is arguing in good faith that government entitlement programs should mirror a Fortune 500 company's executive benefit program, but most agree that it would be better for commercial H.M.O.'s to get on board. "We continue to have discussion with those plans who are not in both Medicaid and Child Health Plus," said Robert H. Hinckley, a spokesman for the State Department of Health. "Of course, we feel the more we have them in all three, the better continuity of care is." 

As it stands, Family Health Plus will be modeled closely on these other Medicaid programs, but patients will have to provide fewer papers to prove their income. The state has yet to set the reimbursement rates but hopes to be able to make them high enough to entice the commercial marketplace. And having used community groups to help enroll children in Child Health Plus with great success, it hopes to leverage that experience as it moves adults into the new program. 

A bill in the State Assembly would eliminate the face-to-face interview requirements and require the state to ask the federal government to change the recertification process from annually to every other year, all ideas supported by New York City, which foots some of the bill.

The state will also require commercial health plans to offer employers of businesses with fewer than 50 employees, or groups of employees working in such businesses, a chance to buy inexpensive coverage subsidized by the state. Under the plan, called Healthy New York, the state hopes to cover 400,000 more people by assuming $30,000 to $100,000 in losses incurred by the plans from its sickest enrollees.

Health care experts are watching carefully to see which group of New Yorkers will be benefiting from the state's purse next. "My hope is that we get the next level of the working poor," said Jennifer Cunningham, executive director of the New York State Council of the service employees union, which lobbied hard for Family Health Plus. "But most important is to get this up and running."