Health Care for Almost All in New York State in 2014

An article by Arnold Birenbaum, PhD (Rose F. Kennedy UCEDD)

July 31, 2013

Arnold Birenbaum, PhD
Arnold Birenbaum, PhD

In the next six months, New York State will take a big step forward in health care reform via voluntary participation in accordance with recent legislation to extend health insurance coverage to the uninsured and permits those with limited coverage to get more for their money. In some ways, the Empire state will be in the vanguard of change and in some ways it will be introducing reform through an unusual form of governance. How this New York State approach will roll out first requires a look at the overall national picture.

Upheld by the United States Supreme Court in the summer of 2012, the Patient Protection and Affordable Care Act (ACA), also known as "Obamacare," was made the law of the land in 2010. This major effort to cover nearly everyone, except illegal immigrants, via private or public insurance, only gets into high gear in October, 2013, when individuals without insurance, and who are not eligible for Medicare or Medicaid, are required to find a health plan via the exchanges, or organized marketplaces for the purchase of insurance, that will be set up in every state. Eligibility is based on whether a person has no coverage or has been insured via a small group policy via employment or some other way of creating commonality (e.g., an alumni association).

Affordability has always been a concern of the builders of the ACA. People with low incomes--up to 200 percent of the federal poverty level--will receive premium subsidies through tax credits. State governments that refuse to develop an exchange will see the Department of Health and Human Services step in to get the job done. Coverage starts on January 1st, 2014. Recruitment, starting October 1st,  remains a major concern since the eligible population for Obamacare,  is not as easily identifiable as, lets say, the Medicare recipients who were given the opportunity to sign up for prescription benefits when they were offered it in 2004 via an amendment to the Social Security Act,  permitting seniors and people with disabilities to get more coverage.

As was true with the advent of prescription coverage via Part D, states with large populations, like New York, could have considerable choice between commercially initiated plans. The ACA never permitted the establishment of nonprofit health plans, known as "the public option," that could have served as benchmarks in each state against which profit-making companies could be measured, when it came to looking at performance and consumer satisfaction.  As a compromise among the legislators who shaped the Act, it did allow the establishment of coop-driven health insurance coverage, which seems to be springing up only in sparsely populated states such as Maine. In New York State, the abundance of insurance policy issuers has lead to a restriction on number of plans that each can offer.

Based on the experience with Medicare, Part D, the prescription drug coverage, the designers of the ACA have built in a plan in the law to make recruitment happen. States that have agreed to establish an exchange, will receive substantial federal assistance to create a method for identifying eligible consumer and an education program manned by a small army of facilitators, known as "navigators" for those individuals considered to be in the small group or uncovered individual market. The Empire State will be able to not only find people eligible to purchase coverage on the exchange, but also determine whether it allows them to receive a subsidy; navigators also will discuss with consumers what plans are available from which insurance companies and how much it would cost to receive the high, medium, or low levels of coverage. The most expensive plans (platinum) will command the lowest levels of deductibles, a situation similar to what is available to those in the workforce who already have an opportunity to pick a plan.

The ACA will be implemented in New York State in 2014 in a unique way. Plans that participate on the New York exchange will be governed by a state agency rather than an independent public corporation. Established by Governor Cuomo's executive order, it has less independence than other state exchanges that are largely public corporations. The Governor found opposition from some Republicans in the State Senate to legislation to establish an independent exchange and decided to get around that barrier but stay within the boundaries of the ACA. As a state agency, the government hires for the exchange will have to go through the rules for all state personnel, including restrictions on salaries. This procedure may slow down the approval of health plans and the location, education, and recruitment of eligible purchasers of health plans. Finally, the health benefit exchange will also be subject to rules related to transparency that impact on our state government. Nevertheless, the train has left the station. According to the Urban Institute's Health Policy Center's estimation, projected in a March 2012 research report, "the number of New Yorkers with insurance coverage increases by roughly 1 million people, with the share of the population uninsured falling from 16 percent to 10 percent." The Empire state's exchange, following the Massachusetts model, will be moving us in the right direction.