Development and Implementation Grant
                            Phase Two National Press Release

Brooklyn, NY




Our goal is to develop and implement a low-cost, comprehensive health insurance product available to small businesses.

In order to "corporatize" our program's leadership, our operating structure is evolving from a group of interested parties, heretofore called a consortium, into a not-for-profit organization.  The office of the Brooklyn Borough President as lead agency and convener is changing.  The original consortium remains in place and is comprised of the private and public hospitals in Northern Brooklyn, the freestanding primary care centers, the Brooklyn Chamber of Commerce, and numerous other community-based organizations.  Many members of the consortium will not take their place on the governing board of the not-for-profit called the North Brooklyn Consortium.  The Brooklyn Chamber of Commerce will replace the Office of the Borough President as lead agency.  Collectively, the entity represents the communities of Williamsburg/Greenpoint, Fort Greene, Bedford Stuyvesant, Ocean Hills-Brownsville, Bushwick, Crown Heights and East New York.

The Consortium's health insurance product, called Brooklyn Health Works, is designed for working low-income families (and individuals) with income between 150-250 percent of the Federal Poverty Level, i.e., $25,000-35,000 for a family of three.  Our goal is to enroll between 10,000-15,000 participants.  This consortium is a true public-private partnership designed to substantially reduce the cost of healthcare insurance premiums so that small business owners can afford insurance for their employees.  We have been able to accomplish this through our grants and subsidies that will reduce administrative costs.  Provider reimbursement rates are well below commercial rates, but they are greater than what bad debt and charity pools can provide to hospitals and free-standing clinics.

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        Program Design

The Consortium is seeking legislation to operate a demonstration program

  • Through this demonstration, a low-cost plan will be made available to the communities that use these facilities.  The Northern Brooklyn Health Consortium has sought administration assistance from the Commissioners of health Insurance to help reduce the cost of premiums for the uninsured population in our targeted demonstration area in Northern Brooklyn.

The Consortium sought waivers from the Department of Health

  • For surcharge covered lives tax.  Healthcare plans pay these taxes for public good.  These costs of doing business can add as much as 7 percent to the cost of a premium.

The Consortium sought access to Healthy New York Stop Loss Pools

  • Access to stop loss pools can provide as much as 10% reduction of premium.  This cost can also add significantly to the cost of doing business, and therefore, to the cost of a premium.

In both instances, administrative waivers were not pushed, although the encouragement and support for a legislative wavier was offered.  These activities were undertaken during the planning grant year.  During 2001, we moved into the legislative cycle.  The state is to play a central role in developing and implementing a low-cost health insurance plan for the uninsured.  Getting legislative waivers is a critical aspect of our program and one for which considerable political support exists.  Therefore, Northern Brooklyn Health Consortium members and staff expanded considerable time and effort seeking legislation to create a demonstration area within Northern Brooklyn.  With these waivers, premium costs, can be reduced by nearly 20 percent for the uninsured population in our targeted demonstration area in Northern Brooklyn.

The Details of our Legislation

We seek special access to these stop-loss funds even though both the Brooklyn Health Works benefit package and target audience differs from the requirement of a state statue called Healthy New York.  Our program differs in important ways that require approval if we want to access stop loss funds.

  • The income levels for participation would extend beyond the 200% of poverty to between 250-300% of poverty.

  • We are seeking to place the product in the community without co-pays and deductibles.  Modest co-pays may be required for office visits.

  • The employer contributions will not be uniformly mandated at 50 percent, but rather subject to individuals employer's determination.  Employers would be required to offer coverage to all eligible employees.

  • The health delivery system includes our provider sponsors, their affiliates and all other providers in the demonstration area who will accept the reimbursement rates established by our consortium network.  An out-of-network benefit if being considered as a separate rider that would be excluded from access to the stop loss pools.

  • The benefit package includes home healthcare and substance abuse treatment, which are excluded from Healthy New York.

While the Healthy New York program expands coverage options, considerable gaps remain.  The following ideas have been suggested to reduce these gaps.

  • An insurance plan designed for employed families with income slightly over the level contemplated by Healthy New York.  This would help a greater number of modest earning uninsured working families afford healthcare insurance.

  • A low cost, comprehensive health insurance plan that does not require significant out of pocket costs and deductibles.

  • A plan that does not result in high premiums for their employees.

Even with the inroads that HRSA 2000 will make toward more accessible health insurance coverage, there will remain a large segment of New Yorkers who will not qualify for these programs because their income is between 200-300% of poverty.

Healthy New York insurance programs will include co-pays and deductibles that our research indicates are still to costly for modest earners to afford.  Our provider sponsors have sought to cope with the cost factor by agreeing to reimbursement levels that will require minimal and/or no-pays and still keep the premium within an affordable range.  Over-utilization will be monitored through our care management programs and will serve as a subject for observation as part of this demonstration.

The community has expressed a strong preference for an open network.  In response, our demonstration area is inclusive of all providers and will seek to keep all enrollees in network.

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        Financing & Outreach Strategies

Outreach Strategy

Our consortium has created a marketing and advertising strategy that will be used to separate from other health plans.  Brooklyn Health Works is Brooklyn's own health plan that is locally accountable, affordable, and accessible.  Our message will stress our concern for the economic health of the community as well as the physical health of members who subscribe to the plan.

The Consortium, through its partnership with the Brooklyn Chamber of Commerce and other smaller, ethnic chambers, trade groups, creating several important distribution and marketing alliances.  Our co-promotion efforts and community outreach alliance with our consortium hospitals and health center providers are expected to expand reach to smaller businesses.  The Chamber membership alone represents nearly 20% of the targeted business prospects.

The Consortium has sought provider participation using discounted fee schedules designed as part of this benefit package.  Modest co-payments will be instituted without legislation.  The issue of participant contribution to the cost of the premium will also be examined.  Contributory plans are difficult to market, often confused by network design and choice features that require higher premiums.  Often these products are unaffordable for the low-income uninsured working families and individuals.

One of the more difficult challenges is the nature and extent to which uninsured persons can or will contribute to the cost of care, be it a co-payment a deductible and/or premium contribution.  Affordability of healthcare coverage plays a significant part in the number of uninsured New Yorkers particularly in Brooklyn.  the portion of the poor and working poor in our Northern Brooklyn targeted communities make it difficult, if not impossible for our residents to either afford healthcare premiums or to contribute to employer sponsored programs. 

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        Accomplishments to Date

The Northern Brooklyn Health Consortium has identified multiple ways in which to bring premium prices within more affordable ranges.  This provider-sponsored collaboration has created an insurance approach that crosses institutional boundaries united in its single purpose to make comprehensive insurance available using whatever methods and means available.  The Consortium is also calling on private philanthropies to participate in the public-private partnership to demonstrate that healthcare can be made affordable and accessible to those who cannot afford to buy it on their own.

The hospitals and freestanding providers in our demonstration area are united in their respect to the Department of Health to waive the covered lives assessment and surcharges on enrollees in the Brooklyn Health Works Plan.  Daily, these healthcare providers in Brooklyn provide uncompensated care to one out of five patients who access their care and from whom the covered lives assessment and surcharges will not be collected.  Consortium members believe this is more important that some level of reimbursement be provided to providers through Brooklyn Health Works than to continue to see a large and growing segment of the community remain uninsured because of unaffordable health insurance premiums.

Prescription drug riders in today's marketplace are becoming quickly affordable for even the middle class.  Brooklyn residents without prescription drug benefits have difficulty affording medications.  Therefore the consortium has developed a unique approach to funding the pharmaceutical components of its health benefit design.  "Carve-outs" are plans in which the employer offers a prescription to drug benefit separate from the rest of the plan in order to control costs.  This program has been approved by the Department of Health and Human Services and is not to be offered along side The Robert Wood Johnson Foundation - sponsored comprehensive health benefit plan designed for small businesses and others who qualify on the basis or lack of coverage options.  Using the various approaches described therein it is our goal to bring the cost of pharmaceutical benefits from $30 to $40 per member per month to under $20 per member per month.

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Brooklyn Health Works must now become an insurance program to be underwritten by an insurer called GHI.  Transitioning our program from an alliance of healthcare providers, academic institutions and community organizations to a fully operational insurance program has occupied a significant amount of time and energy.

No Go in 2001

Legislation was drafted and was introduced.  This legislation was introduced in June as a budget bill and positive action on it was likely if the State would have passed a budget bill during the normal legislative session.

Never in the history of the State of New York has the Governor and the Legislature been so delinquent in passing a budget.  It never did.  After the World Trade Center Disaster, the legislature quickly convened and adopted last year's budget.  No new items were passed, except appropriations to the Trade Towers.  Most notably Brooklyn, our demonstration legislation was not acted upon.  We will pass our legislation again when the legislature convenes in January 2002.

We are also moving forward with legislation.  We have re-priced our products and have introduced modest co-pays and slightly higher premiums.  Even with these adjustments, our premiums will be 50-60 percent lower than commercially available insurance products in the market today.

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        Contact Us

Mark Kessler
Vice President, Program Development
Brooklyn Chamber of Commerce
25 Elm Place, Suite 200
Brooklyn, NY  11201
Phone:  (718) 875-1000 ext 121
Fax:  (718) 237-4274

Brooklyn HealthWorks Marketing pages:

Nancy Gaeta M.S.
Program Planners, Inc.
230 West 41st St.
New York, NY  10019
Phone:  (212) 840-2600
Fax:  (212) 769-4094

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Communities In Charge 2002 is a program of The Robert Wood Johnson Foundation.
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