June 14, 2011

Gov. Cuomo Submits Health Benefit Exchange Bill to Rival NY Senate Majority Bill

New York State Governor Andrew Cuomo submitted a Governor’s program bill yesterday, June 13, 2011, proposing legislation that would comply with the requirements of the Federal Patient Protection and Affordable Care Act (PPACA) to create a Health Benefit Exchange.  The exchange, once established, will be a statewide “marketplace” through which individuals and small business who do not have health insurance will purchase benefits.  PPACA requires that all states  have an exchange in place by January 1, 2014.  For those states that do not set up their own exchange, the United States Department of Health and Human Services (HHS) will do so for them.

If a state establishes its own health benefit exchange that satisfies the PPACA criteria, the federal government may determine by January 1, 2013 that the state is qualified to run its own exchange.  The federal government will provide funds to the state to support the planning, implementation and operation of the statewide exchange through December 2014.  Health care advocates have urged state officials to move forward with legislation laying out a state health benefit exchange so that New York can get the maximum federal planning grant available.

Governor Cuomo’s plan, which follows the release of a similar bill by the Senate Republican majority last week, would allow the health benefit exchange to negotiate on behalf of consumers and small businesses.  Cuomo stated that the exchange will be a “centralized, customer-service oriented marketplace” where people and small groups will be able to choose from an array of qualified health plans and obtain decisions on eligibility and subsidies.  The exchange would establish minimum requirements that health insurers would have to meet and create procedures for certification of health plans.  It would also assign ratings to each plan, determined by quality and price.  Under Cuomo’s bill, the exchange would help consumers by assisting with enrollment, operating a toll-free phone line and website and it would award grants to organizations that educate consumers about the health benefit exchange.

The Senate bill, calling for the establishment of the “New York Health Benefit Exchange,” has been criticized because it does not grant the exchange proper oversight authority after it has been established.  Under the Senate’s proposal, the exchange’s 11-member board of directors has the potential to include interest groups with a financial stake in the exchange, and some advocates have expressed concern that they would not “operate in the best interest of New Yorkers.”  The board of directors would consult with regional advisory committees, but would not be allowed to take any action to implement their recommendations—should a change to the exchange become necessary, the only action the board could take would be to propose new legislation.

While similar, Governor Cuomo’s proposal calls for a board of directors made up of experts in the areas of: individual health care coverage, small employer health care coverage, health benefits administration, health care finance, public or private health care delivery systems, and purchasing health plan coverage.  The board of directors would consult with an advisory committee comprised of 18 representatives of stakeholders and sectors that will be impacted by the operation of the exchange, including health care consumers, small businesses, the medical community, and insurers.

No legislation regarding a health benefit exchange has been introduced in the Assembly as of yet.

The full text of Governor Cuomo’s program bill is available here.

The full text of the New York Senate Bill (S.5652) is available here.