Gov. Cuomo issued an executive order last Thursday establishing a statewide Health Exchange in compliance with the President’s health reform, despite the year-long effort of the Republican majority in the State Senate to block any measures condoning the Affordable Care Act, whose constitutionality is now being weighed by the Supreme Court. Cuomo cited the economic impact of the exchange in lowering health care costs and bringing new jobs to the state.
"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. 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," Governor Cuomo said. “Establishing the health exchange will bring true competition into the health care marketplace, driving costs down across the state."
The Health Exchange will connect individual consumers and businesses to low cost insurance provided by the Affordable Care Act. According to the Governor’s office, the health care costs of uninsured individuals exceeds $600 million annually; a sum that is paid for by the state and local governments. The unreimbursed costs, passed on to individual customers and small businesses, lead to an average increase of $800 annually for family premiums. Individuals who buy their coverage directly can expect to see about 66 percent reduction in cost.
For small businesses, the cost of coverage for employees will fall by 22 percent. Regional advisory committees, with representatives from small businesses, health care providers, labor unions, insurers and consumer advocates, will provide recommendations based on regional factors and public input.
“By creating New York's Health Insurance Exchange, over 1 million people who don't have health coverage will, and costs will be reduced by as much as 66% for individuals and 22% for small businesses," Karen Scharff, Executive Director of Citizen Action of New York, said in a statement.
"An estimated 10,000 uninsured cancer patients across New York are waiting for relief in the form of a health insurance exchange,” said Donald Distasio, C.E.O. of the American Cancer Society of New York and New Jersey, who thanked the Governor for “taking bold action” in issuing the order.
In late March, New York State’s top financial regulator issued a statement urging the Senate Republicans to support the Exchange. Benjamin Lawsky, Superintendent of New York State Financial Services said that health insurance is one of top issues for small businesses, which he credited with generating two-thirds of all new jobs in the state. "This should not be a Republican or Democratic issue — it’s about jobs. Certification for the state exchanges begins in mid-2012 and we must be able to demonstrate we can run it by January 2013. If we don’t start building ours immediately, we will have a federal exchange in 2014," Lawsky said.
If the state did not take this action, the federal government would have interceded and established a federally-operated Exchange within the state, as required by the Affordable Care Act. The act also requires that the Exchange be operating by January 1, 2014 and be financially self-sustaining, unsubsidized by the state, by January 1, 2015. Applications will be accepted beginning October 2013.
Gov. Cuomo’s Executive Order has generally gone unchallenged by the Senate, who were mostly prepared for approving the Exchange in June, when the Supreme Court’s decision is reached. Senate Insurance Committee Chairman James Seward has said, “The governor’s going forward with this executive order, we’ll have to see what’s in it, but certainly I think it’s appropriate for him to take this move at this time and at least some of the preliminary work can continue with his executive order and at some point we’ll have a clearer picture as a Legislature.”
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