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Governor Cuomo’s Executive Order for a State Health Insurance Exchange

April 24, 2012

Why is it important?  Because federal health insurance reform provides an unprecedented opportunity to reduce the ranks of the uninsured, a population numbering over one million people in New York.  Because New York has moved ahead on many fronts to implement federal health care reform, but the failure to enact a bill creating a State Health Insurance Exchange has been a glaring omission.

The Patient Protection and Affordable Care Act (ACA) calls on states to establish Exchanges in order to provide a marketplace for individuals and small businesses to purchase health insurance coverage.  Exchanges are expected to significantly lower the cost of coverage for individuals and small businesses by creating competition among insurers.  They also provide federal subsidies to help pay those with income below 400% of the federal poverty level with premium payments.  States that fail to create an exchange will be subject to a one-size-fits-all federal Exchange, which is unlikely to be a good fit with local needs and health programs. 

Governor Cuomo first proposed legislation to create a state Exchange in the 2011 legislative session.  The bill garnered support from leadership in both legislative branches but was not voted upon before the session ended.  The Senate withheld its support for the bill this year, however, and the proposal had to be withdrawn from the final budget.  On April 12, the Governor stepped into the political gulf and issued an Executive Order to set up a state Exchange. 

NEW YORK WELL-POSITIONED FOR REFORM GENERALLY

The Governor’s Executive Order is the latest in a series of cross-agency efforts to ensure that New York is meeting targets for federal certification of a state-run Exchange.  Significant steps that New York has taken thus far include the following: 

  • In 2011 New York passed legislation amending the state’s insurance code to meet standards set out in the ACA for regulation of the private insurance market. 
  • New York has also made significant headway toward creating a new system for integrating Exchange and Medicaid eligibility and enrollment:

-New York received an Early Innovator federal award in February 2011 and additional federal support for Medicaid eligibility related activities.
-The new system will vertically integrate enrollment across applicant income levels, so that there is “no wrong door” for publicly subsidized or private health insurance.
-The new system will have the capacity to horizontally integrate with enrollment and eligibility for other social services programs.

  • New York has several Exchange related studies underway and is conducting outreach to industry experts, employer and consumer groups and the public through publicly convened meetings and a regularly updated website.
  • Finally, New York has already made many of the required streamlining and simplification adjustments to its Medicaid program and is well positioned to maximize federal reimbursements for Medicaid expansion. 


THE APRIL 12 EXECUTIVE ORDER

The Executive Order establishes the New York Health Benefit Exchange within the Department of Health (NYSDOH).  NYSDOH, in conjunction with the Department of Financial Services, is authorized to set up the Exchange to perform necessary functions, which include: 

  • Facilitating enrollment in health coverage
  • Purchasing and selling qualified health plans
  • Enrolling individuals in coverage
  • Providing federal subsidies (tax credits and cost sharing reductions)
  • Entering into agreements to carry out duties
  • Convening regional advisory committees
  • Becoming financially self-sufficient.


Even with this groundwork for an Exchange in place, New York will need to move quickly to ensure that its Exchange is fully operational by the federal deadline of October 1, 2012.  Important policy decisions that still loom include a financing mechanism, authority to engage in active purchasing, standardization of benefits, and the role of navigators, agents and brokers. 

Creation of an Exchange within a public authority, as called for by the failed legislation, would have allowed New York to move ahead more quickly.  Nonetheless, the Executive Order makes it possible to maximize federal assistance while designing an Exchange uniquely suited to New York’s complex market and mixture of public and private coverage.   We applaud the Governor for his bold and necessary action.

For further coverage of Governor Cuomo’s Exchange Executive Order, see media coverage at:
http://www.nytimes.com/2012/04/18/opinion/a-deft-health-care-move.html
http://www.nytimes.com/2012/04/13/nyregion/cuomo-orders-health-insurance-exchange-in-new-york.html

For discussion of Supreme Court arguments regarding the constitutionality of the ACA, see:
http://www.kff.org/healthreform/upload/8270-2.pdf
http://topics.nytimes.com/top/reference/timestopics/organizations/s/supreme_court/affordable_care_act/index.html

 





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