National healthcare reform, and the passing of the Affordable Care Act in 2010, was one of the most hotly debated and widely publicized issues of President Obama’s first term. One provision of the Affordable Care Act is the establishment of state Healthcare Exchanges to help individuals and small businesses navigate their new options for purchasing health insurance.
These Exchanges will be a resource for individuals and small businesses to compare healthcare costs and receive assistance in selecting private coverage. They will also allow individuals to check their eligibility and sign up for public programs like Medicaid. The Affordable Care Act mandates that each state have an Exchange set up by 2014.
How Did New York Set Up Its Exchange?
(...a little background)
Each state has the opportunity to set up their own federally-subsidized Exchange, or have the federal government run the Exchange for the state by way of a Federally-Facilitated Exchange. So far, twenty-six states have already opted out of creating their own state-run exchange, and instead will leave their Exchange to the federal government. New York is among the states that has chosen to set up and run its own Exchange.
During the 2011 and 2012 sessions, the New York legislature failed to approve a health exchange law so on April 12, 2012 Governor Cuomo issued Executive Order #42 to establish a statewide Health Exchange compliant with the Affordable Care Act. Cuomo noted, “creating this health exchange will lower the cost of health insurance for small businesses, local governments, and individual New Yorkers across the state. The sky-high cost of insurance in New York is driving businesses out of the state and preventing lower income New Yorkers from being able to afford needed coverage.”
The plan for New York’s Exchange was approved by Health and Human Services on December 14th, 2012 and insurance plans purchased through the Exchange will become effective January 1, 2014.
Cuomo’s executive order established five Regional Advisory Committees to facilitate in the creation and operation of the New York Health Benefit Exchange.
Each regional committee is made up of representatives of consumers, small business, health care providers, insurance agents and brokers, labor organizations and other stakeholders and will provide advice and recommendations regarding the implementation of the Exchange. New York selected the Oxford EPO plan from Oxford Health Plans, as its benchmark plan. This plan is the model for the state’s essential health benefits which must be included in all plans sold on the Exchange.
How Will NY's Health Care Exchange Work? How will businesses and individuals benefit? When Can I Start Shopping for Health Care Through the Exchange?
The Exchange will function primarily as a website that facilitates comparison shopping for healthcare plans, as well as a resource to answer consumer questions. According to the official health exchange website for New York State, the Exchange is ”a new way to compare and buy health insurance similar to the way people can compare and buy lots of products today.”
Exchange resources will also be available over the phone, by mail, or in person. The official website even provides a countdown clock to when the Exchange opens for enrollment on October 1, 2013. On February 13th, it was announced that the New York Health Benefit Exchange would open community-based locations that will provide in-person assistance to potential health insurance customers.
The New York Health Benefit Exchange, in conjunction with subsidies set up by the Affordable Care Act, will lower costs for both individuals and small businesses. Individual consumers who purchase their own insurance directly will see costs drop by up to 66%. Small businesses can expect to see a 22% drop in healthcare expenses for employees.
The Exchange will allow small businesses to pool together in purchasing insurance, thus garnering lower rates. And, small businesses providing employees with health insurance through the Exchange may be eligible for tax credits which can help off-set insurance costs.
While corporate forces have tried to paint the Affordable Care Act as an exorbitant and unnecessary expense for tax-payers, the Exchange will actually save tax-payer money since state and local governments currently pay $600 million a year to cover the health care costs of uninsured individuals. The Exchange will connect uninsured individuals to potential insurance providers.
New York State has received more than $368 million in federal grant money to set up the Exchange. Creating the Exchange in New York will be of no cost to the state, but will be funded entirely by the federal government until January 1, 2015, at which time the Exchange will be self-funded.
The goal of the Affordable Care Act and its mandated state exchanges is to foster a competitive marketplace that lowers healthcare costs and ultimately insures more people. Currently, about 2.7 million individuals in New York do not have health insurance coverage. Through the New York Exchange, it is estimated that over one million New Yorkers, including 615,000 individuals and 450,000 small business employees will receive healthcare coverage.