Aims To Reduce Coverage Costs
Gov. Andrew M. Cuomo issued an executive order to establish a statewide health exchange, a move that aims to significantly reduce the cost of coverage for individuals, small businesses, and local governments.
The exchange will be entirely financed by the federal government and will be instrumental in establishing the first-ever comparative marketplace to bring down the cost of health insurance. By lowering the cost of insurance, Cuomo said, the exchange will also help more than one million uninsured New Yorkers afford coverage.
“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,” Cuomo said. “Establishing the health exchange will bring true competition into the health care marketplace, driving costs down across the state.”
If New York fails to establish an exchange, the federal government will step in and establish a federally operated exchange in the state, in order to comply with the Affordable Care Act. As required by the Affordable Care Act, the exchange will be financially self-sustaining, requiring no state subsidy, by Jan. 1, 2015.
The exchange will allow New Yorkers to obtain health coverage and facilitate the purchase and sale of qualified health plans in this state. Additionally, Cuomo said, the exchange will ensure that eligible small businesses and individuals receive premium tax credits and costsharing reductions.
In addition, the governor noted, the exchange is projected to save New York taxpayers hundreds of millions of dollars each year by helping connect New Yorkers and businesses to health insurance that will be made available by the Affordable Care Act.
Currently, state and local governments pay more than $600 million every year to cover the health care costs of uninsured individuals.
Unreimbursed costs are passed on to individuals and small businesses, adding an additional $800 in premiums on a family’s average cost each year.
With the exchange and the tax subsidies that will be available as a result of the Affordable Care Act, individuals who currently buy their coverage directly will see their cost drop by 66 percent. The exchange will also enable small businesses to cut costs.
As a result of the increasing cost of health care, Cuomo noted, an increasing number of small businesses cannot afford to purchase health insurance coverage for their workers. With the exchange, small businesses will see the cost of providing coverage to their employees drop by 22 percent.
The executive order allows for regional advisory committees consisting of consumer advocates, small business consumer representatives, health care providers, agents, brokers, insurers, labor organizations, and any other appropriate stakeholders to advise and make recommendations on the establishment and operation of the exchange, including recommendations about relevant regional factors.
The advisory committees will provide opportunities for public input.
