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Should insurance companies in New York be in the business of providing home health care?

This stock photo shows a health care worker measuring the blood pressure of a woman during a home visit.
Adobe Stock
This stock photo shows a health care worker measuring the blood pressure of a woman during a home visit.

Some state lawmakers want to take health insurance companies out of the business of providing home health care, saying it’s a failed experiment that’s costing the state too much money that could better go to directly paying for that care.

When New York reformed its state and federally funded Medicaid program in 2011, it allowed health insurance companies to begin managing home health care. 

Now, 13 years later, Senate Health Committee Chair Gustavo Rivera said it has cost the state billions of dollars in unnecessary administrative costs and profits to the insurance companies and needs to end.

“It is a failed experiment, just over the last four years alone, over $6 billion have gone into the pockets of insurance companies, as opposed to the pockets of workers who provide care or to the care of people that are the long-term care patients,” Rivera said. “The bill would do away with managed long-term care plans and switch back to a fee-for-service model that would be managed by the state.”

Rivera said the bill, which is sponsored in the Assembly by Health Committee Chair Amy Paulin, would involve a transition period to minimize any disruption.

The managed long-term care plans, or MLTCs, are fighting the bill, asking the home care agencies they contract with to send form letters to lawmakers stating their opposition.

Alicia Laible-Kenyon is executive director of Elderwood Health Plan in Buffalo, which works with licensed home health care agencies to provide home health care for vulnerable adults.

She said the MLTCs, by assigning recipients a care manager, provide help that goes beyond home health care. That could include referrals to physical therapy or free or subsidized meals or other services that she said are the social determinants of health.

“Food security, housing stability, are they going to have their electricity turned off,” said Laible-Kenyon, who added some seniors have a lot of pride and don't always want to share that they are short on food or money. 

“Our social workers gain their trust over a long period of time,” she said. “Some of these members we've been working with for many, many years, so that we can learn what their true needs are.” 

She said previous actions by the state Health Department have already cut in half the number of managed long-term care plans operating in the state, and she said the system should absorb those changes first.

Laible-Kenyon said she could not speak to the money that insurance companies charge for the services, or how much the state pays the MLTCs. But she said the home care workers must be paid at least minimum wage, according to state law.

Damien LaVera, a spokesperson for the New York State Coalition of Managed Long Term Care Plans, said breaking down exact costs is “complicated” because each plan negotiates rates separately with its care providers, and specific payment levels can vary widely, based on several factors.

Laible-Kenyon also took a shot at state lawmakers who back the bill to end MLTCs.

“Every couple of years, you have politicians who come out, and they really want to make a mark, they want to put their name on something,” she said. “They put forward these proposals that really do cause a massive disruption to our community. And I'm not saying that they're doing it with ill intention. But I don't think that they have the full knowledge of what it is that they're doing and the negative impact that it's going to have.”

Rivera called Laible-Kenyon's criticism “a very good theory.” 

“However, it ignores the fact that I didn’t just get here,” he added. “I have been here for 14 years; I've been the chair of the Health Committee for six.

Rivera said he’s held consistent views throughout that time.

“In that we should be investing in systems and not in corporate profit,” he said.

The bill comes at a time when Gov. Kathy Hochul has proposed slashing $1.2 billion from a popular home health care program known as Consumer-Directed Care. That program allows people with disabilities to hire their own home care workers and have more control over how their care is managed.

Rivera said he’s “perplexed” by those cuts, and that the Senate and Assembly budget plans restore the money. He said the program, which does not involve insurance companies, has virtually no overhead expenses, so the bulk of the money that a recipient pays goes directly to the home care workers.

Usage of the consumer-directed care program has greatly increased in the past few years. Rivera said ending the health insurance companies' involvement in MLTCs would save $1 billion to $2 billion a year and help pay for those costs.

Laible-Kenyon said her organization does not support the governor’s cuts to consumer-directed care programs, adding that she believes that the two approaches to home health care can co-exist.

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.