The State of New York is knowingly putting health insurance coverage for thousands of home care workers at risk. This is an unintended consequence of hiring a single fiscal intermediary (FI) for the Consumer Directed Personal Assistance Program (CDPAP), a Medicaid-funded arrangement that pays wages to home care workers selected by low-income elderly and disabled New Yorkers. It’s a problem that’s also well within the State’s power to prevent.

Since 2015, the State has delegated responsibility for CDPAP payroll administrative services to hundreds of private FIs. But hoping to contain galloping administrative costs, beginning April 1 it has moved to consolidate all such operations under a single company: Public Partnerships Limited (PPL), a private equity-owned business based in Georgia. PPL is set to receive $225 million annually to serve as paymaster for all 350,000 to 400,000 workers in the $9 billion CDPAP.

But PPL’s approach to health insurance caught State officials by surprise. Most existing FIs did not provide coverage. In contrast, PPL has notified workers upon registration that they would be automatically enrolled in a bare-bones plan at a cost of $0.87/hour deducted from their pay, and also offered the option to purchase a more conventional “Bronze-level” plan.

Both options are, in short, inadequate. The default minimal plan is so meager as to be largely unusable, while the other – though more comprehensive – is unaffordable. Ironically, merely being offered the Bronze plan disqualifies many workers from high-quality coverage previously available through New York’s Affordable Care Act (ACA) marketplace. PPL is probably banking on few taking the minimal plan, and then using premiums collected on the alternative to cover the mandated employer share of that plan’s cost.

This is just the latest misstep in a long and largely unsuccessful attempt to contain the State’s share of home care costs. In 2011, a Medicaid Redesign Team appointed by Governor Andrew Cuomo recommended privatizing the Medicaid home care benefit. The State then replaced public oversight with private, mostly for-profit Managed Long-Term Care (MLTC) plans, many run by giant health insurers. But even as demand for home care has grown. hoped-for savings haven’t materialized. By January 2024, enrollment had reached 335,000 – triple the number from 2013. New York State’s share of costs ballooned by $6 billion over that period. (The MLTCs have done just fine financially under this arrangement.)

Compounding the problem was a 2015 State decision to transform the Medicaid home care system from one largely operated by nonprofit agencies (who had trained and certified workers) into a virtual Wild West under CDPAP. Dozens of new companies flooded the market, advertising on the subway that people could now be paid to care for their family members (a practice previously prohibited). In 2017, home care jobs became even more appealing when the State augmented pay by $4.09 per hour; intended to cover fringe benefits, most workers instead received it as welcome extra cash. And enrollment and State Medicaid costs continued to mushroom.

Intense lobbying by powerful stakeholders like UnitedHealthcare, Aetna, and Anthem has stymied efforts to reform the MLTC system. So, last year the administration of Governor Kathy Hochul shifted its focus to the smaller, less powerful FIs. Despite their fierce public relations and legal resistance, their official status with the State ended April 1, with clients and caregivers now put on PPL’s single platform.

The transition has been rocky. “Hochul’s homecare program havoc leaves workers unpaid,” the New York Post reported, just two weeks after the State ordered the shutdown of the existing FIs. Only 100,000 workers were paid on April 8; 60,000 PPL enrollees were not, due to processing snafus. Tens of thousands remain in limbo: no longer part of an operating FI and not yet registered with PPL.

Then there’s the matter of health coverage. Buried on Page Two of PPL’s welcome letter to workers is a brief description of two health insurance options. The first is a Minimum Essential Coverage (MEC) Plan, which includes only preventive care: no coverage for doctor visits, hospital services, or prescription drugs. New York City workers are automatically enrolled. The second is a Minimum Value (MV) Plan, available only to full-time workers (130 hours/month) who are willing to pay $212 per month. This plan offers conventional coverage – but only after the worker also pays an annual $6,350 deductible.

Neither the State nor PPL has adequately explained the rationale for this insurance program. PPL appears to believe it is subject to the ACA’s “large employer” mandate, which imposes annual penalties of $2,900 per worker for failing to offer affordable essential coverage. This is a questionable assumption; it is the clients, not PPL, who hire, supervise, and fire CDPAP workers.

Still, PPL seems to be seeking safe harbor by offering the ACA-defined MEC plan for preventive services. And as inadequate as PPL’s MV plan (advertised as an Anthem Bronze plan) may be, it is also technically affordable and ACA-compliant.

Despite the financial burden on workers, the State is defending PPL’s insurance. “Under CDPAP today, thousands of full-time workers have no health insurance because their fiscal intermediaries simply don’t offer it – and that’s unacceptable,” Hochul spokesperson Sam Spokony told NY Focus. “Under the new CDPAP transition, every full-time CDPAP worker in New York will have access to health insurance.”

Other than a mealy-mouthed warning that “according to federal health insurance rules, an offer of the Anthem Bronze Plan could make you ineligible for health insurance such as New York’s Essential Plan or a qualified health plan through NY State of Health,” the State Health Department appears unconcerned about the effect of offering the MV plan, or the cost of the useless MEC plan. But the rules are clear: being offered an “affordable” plan disqualifies a worker from receiving subsidized coverage through the ACA marketplace.

Most home care workers are income-eligible for New York State’s Essential Plan. The premium is $0, the deductible is $0, and copays are modest: $15 for a doctor visit, $150 for an inpatient stay. The income cap for eligibility is $39,125 for an individual, $52,875 for a two-person household, and $66,625 for a family of three. More than 1.8 million New Yorkers are enrolled, including – for now – many home care workers.

Here's a side-by-side comparison between PPL’s Anthem Bronze plan and Anthem’s Essential Plan of who pays, and how much, under selected scenarios:

Such an unsatisfactory arrangement was not the State’s intent when it selected PPL. It also clearly has the authority to direct PPL not to offer health insurance. In the extremely unlikely event that the federal government penalizes PPL for failing to meet ACA mandates, the State has far less harmful -- and less costly – ways to compensate than sacrificing the health and well-being of tens of thousands of low-wage workers.

Barbara Caress has worked for many years in non-profit, union, and public agency health care policy and administration. She teaches public health policy at Baruch College.

Photos by: healthaide.org

Why Is the State Jeopardizing Health Insurance for Home Care Workers?