New York’s Health Exchanges Prepare For Obamacare Housecall
Existing programs look to remain, though some call for state to make fresh start
Wed, 02 Jun 2010 08:01:00
When President Bill Clinton was trying to carry out healthreform in the mid-’90s, he stumbled across an idea thought up by some academics at a meeting in Jackson Hole, Wyo. They believed health care costs could be brought down by starting a regulated marketplace in which a certain pool of consumers would shop for pre-approved private health plans.
Clinton adopted the idea, then called “managed competition,” as the lynchpin of his proposal. A decade and a half later, President Barack Obama’s successful health care overhaul depends on the idea.
For most states, and for bureaucrats in Washington, these “health insurance exchanges,” as they are now called, exist only on paper, and officials have little clue how they will work once implemented. But not in New York, where officials can study the example of two of the country’s only up-and-running health insurance exchanges similar to what is set out in the health care bill.
This early expertise will be invaluable, but it comes with strings. The managers of the existing exchanges are jockeying to run the future system, while some people think the state should start from scratch.
One exchange, called HealthPass, is based in lower Manhattan. It was created with seed money from the city in 1999 but was a self-sufficient non-profit by 2004. Working only with small businesses of up to 50 employees, HealthPass helps cover some of the working uninsured by offering flexibility: employers set their monthly contribution to employees’ insurance and employees choose from a range of plans to spend that money on, topping it off with their own cash for better coverage.
About half of HealthPass’ 4,100 enrolled groups—mostly businesses with up to nine employees—had no coverage before signing up. Its executives eagerly point to these successes and the fact that their infrastructure could be scaled up quickly (within about four months, they say). If HealthPass does not win a role in the new system, it will likely be put out of business.
“That’s a nice tale to be able to tell to state legislators, to the congressmen, to the Department of Insurance, where we were able to make inroads with thisflexibility to help people who previously didn’t have insurance,” said HealthPass CEO Vince Ashton. “We have the back-end capabilities to do all this stuff.”
Meanwhile, a 16-year-old private health exchange in Long Island, the L.I.A. Health Alliance, is trade-marking its tagline, “New York’s Health Insurance Exchange,” and looking at expanding upstate. Insurance Department superintendant James Wrynn has met twice recently with its CEO.
As a for-profit company, L.I.A. Health Alliance is not eligible to lead the state exchange, but its CEO, Fred Barba, says the wording of the federal bill will not allow a non-profit to run it either.
Deadlines are coming up quickly for such a sweeping change. The new exchanges must be in place by January 2014 and self-sustaining by 2015. But New York’s first broad proposal is due at the end of this year.
Gov. David Paterson has assembled an inter-agency task force to begin looking at healthreform in general. The task force includes Wendy Saunders, deputy secretary for health, and Troy Oeschner, Insurance Department deputy superintendant. But despite the fact that the companies have released their talking points, the state has many options, and few people agree yet on what direction to take.
There are decisions over whether to combine the individual, small business and larger business markets, for example, and to decide whether exchanges will be statewide, regional, or even cross state lines. Health and Human Services will not finish drafting its own guidelines until next year.
Mark Jaffe, director of the Greater New York Chamber of Commerce, says he is concerned that HealthPass offers too many health plans to be a streamlined system. He wants New York to cast a wide net, picking the best ideas and filtering out the rest. But Margaret Moree, director of federal affairs at the Business Council of New York State, said one of her organization’s main hopes is to keep the exchange out of public hands. The only other option under the federal bill is to give control to a non-profit.
Despite the ongoing meetings and politicking around the issue, insurance department officials are firm that the perceived activity over the exchange policies is in contrast to a reality of slow, careful steps that will involve the federal government, the governor, stakeholders and the public.
“We’re hard at work on all aspects of health care reform, but it’s much too early to have a useful discussion about the health insurance exchange,” said David Neustadt, a Health department spokesman.
Clinton adopted the idea, then called “managed competition,” as the lynchpin of his proposal. A decade and a half later, President Barack Obama’s successful health care overhaul depends on the idea.
For most states, and for bureaucrats in Washington, these “health insurance exchanges,” as they are now called, exist only on paper, and officials have little clue how they will work once implemented. But not in New York, where officials can study the example of two of the country’s only up-and-running health insurance exchanges similar to what is set out in the health care bill.
This early expertise will be invaluable, but it comes with strings. The managers of the existing exchanges are jockeying to run the future system, while some people think the state should start from scratch.
One exchange, called HealthPass, is based in lower Manhattan. It was created with seed money from the city in 1999 but was a self-sufficient non-profit by 2004. Working only with small businesses of up to 50 employees, HealthPass helps cover some of the working uninsured by offering flexibility: employers set their monthly contribution to employees’ insurance and employees choose from a range of plans to spend that money on, topping it off with their own cash for better coverage.
About half of HealthPass’ 4,100 enrolled groups—mostly businesses with up to nine employees—had no coverage before signing up. Its executives eagerly point to these successes and the fact that their infrastructure could be scaled up quickly (within about four months, they say). If HealthPass does not win a role in the new system, it will likely be put out of business.
“That’s a nice tale to be able to tell to state legislators, to the congressmen, to the Department of Insurance, where we were able to make inroads with thisflexibility to help people who previously didn’t have insurance,” said HealthPass CEO Vince Ashton. “We have the back-end capabilities to do all this stuff.”
Meanwhile, a 16-year-old private health exchange in Long Island, the L.I.A. Health Alliance, is trade-marking its tagline, “New York’s Health Insurance Exchange,” and looking at expanding upstate. Insurance Department superintendant James Wrynn has met twice recently with its CEO.
As a for-profit company, L.I.A. Health Alliance is not eligible to lead the state exchange, but its CEO, Fred Barba, says the wording of the federal bill will not allow a non-profit to run it either.
Deadlines are coming up quickly for such a sweeping change. The new exchanges must be in place by January 2014 and self-sustaining by 2015. But New York’s first broad proposal is due at the end of this year.
Gov. David Paterson has assembled an inter-agency task force to begin looking at healthreform in general. The task force includes Wendy Saunders, deputy secretary for health, and Troy Oeschner, Insurance Department deputy superintendant. But despite the fact that the companies have released their talking points, the state has many options, and few people agree yet on what direction to take.
There are decisions over whether to combine the individual, small business and larger business markets, for example, and to decide whether exchanges will be statewide, regional, or even cross state lines. Health and Human Services will not finish drafting its own guidelines until next year.
Mark Jaffe, director of the Greater New York Chamber of Commerce, says he is concerned that HealthPass offers too many health plans to be a streamlined system. He wants New York to cast a wide net, picking the best ideas and filtering out the rest. But Margaret Moree, director of federal affairs at the Business Council of New York State, said one of her organization’s main hopes is to keep the exchange out of public hands. The only other option under the federal bill is to give control to a non-profit.
Despite the ongoing meetings and politicking around the issue, insurance department officials are firm that the perceived activity over the exchange policies is in contrast to a reality of slow, careful steps that will involve the federal government, the governor, stakeholders and the public.
“We’re hard at work on all aspects of health care reform, but it’s much too early to have a useful discussion about the health insurance exchange,” said David Neustadt, a Health department spokesman.
