Cuomo authorizes state health insurance exchange
If the Supreme Court upholds the Affordable Care Act when it rules later this year, New York state will be prepared to fulfill its responsibilities under the divisive health care law.
Gov. Andrew Cuomo on April 12 issued an executive order authorizing the creation of the New York Health Benefit Exchange as a marketplace for individuals and business owners to purchase health care plans.
While the move was expected ”“ Cuomo had said publicly that he would use his executive powers to create the federally-mandated exchange if the state Legislature failed to act ”“ health care organizations praised the governor last week.
“We support the implementation of the exchange as a way of alleviating the current crisis facing those that don”™t have access to care because of lack of insurance,” said Kenneth E. Raske, president of the Greater New York Hospital Association, in a statement.
Once operational, the exchange will save taxpayers hundreds of millions of dollars annually, according to the governor”™s office.
Currently, the state and local governments pay more than $600 million each year to cover the cost of health care for 2.7 million uninsured New Yorkers.
Additionally, individuals who buy their own health coverage and small businesses that provide coverage for employees will see their costs decline by 66 percent and 22 percent, respectively, with the implementation of the exchange and tax subsidies that will be available under the Affordable Care Act.
“The bottom line is that creating this health exchange will lower the cost of health insurance for small businesses, local governments, and individual New Yorkers across the state,” Cuomo said in a statement.
Under the Affordable Care Act, state governments are required to create their own health insurance exchanges by January 1, 2013, with the respective exchanges operational by January 1, 2014.
If any state fails to act and if the law is upheld by the Supreme Court, that state”™s residents will be required to participate in a federal health care exchange.
Each state”™s exchange will be fully paid for by the federal government. New York state has already received $88 million in federal grants related to the planning of the exchange.
With the creation of its own health insurance exchange, New York state officials will be responsible for its operation and for deciding which benefits will be provided to those enrolled in the exchange, which health plans will be allowed to participate, what rules should apply to the marketing of products by health plans, and how to operate the Small Business Health Option Program component.
While Cuomo”™s move was applauded by the Healthcare Association of New York State and Excellus Blue Cross Blue Shield, among others, the exchange has had its share of opponents.
Republicans in the State Senate held up a bill that had been approved by the Assembly and would have created the exchange, and again blocked a measure in this year”™s budget that would have created the health insurance marketplace.
Michael Durant, director of the New York chapter of the National Federation of Independent Business (NFIB), said the organization has not taken a position on the state”™s exchange but noted NFIB is one of the parties suing in the Supreme Court for the Affordable Care Act to be repealed.
“I have a lot of concerns that federal health care reform is not going to provide the substantial savings that businesses need in terms of rising health care costs,” he said. Durant added that if the law is upheld by the court, NFIB would work to ensure that the statewide exchanges are as cost-efficient for businesses as possible.
Among businesses across the state surveyed last December by HealthPass New York, a nonprofit commercial health insurance exchange for small businesses that operates in the Hudson Valley, New York City and Long Island, 84 percent of respondents called health insurance exchanges “a good idea” and 76 percent said they would consider using such an exchange.
Mark Kessler, director of strategic initiatives at HealthPass, said it”™s likely that most users of the exchange will be small businesses and not individuals.
“I don”™t expect to see hundreds of thousands of New Yorkers purchasing health insurance through the individual exchange,” he said. “I still expect employer-sponsored health insurance to be the primary vehicle through which most people access insurance, putting aside those people who qualify for Medicaid and Medicare.”