For health exchanges, all eyes on the Supreme Court

New York’s proposed health insurance exchange, the virtual marketplace where consumers can shop for insurance, is falling prey to bad timing.

Next Monday, the Supreme Court is scheduled to hear the first of three days of arguments in a challenge to the federal Affordable Care Act, President Barack Obama’s healthcare reform law that would establish the exchange system. And while the Court won’t rule on the constitutional law until June, Gov. Andrew Cuomo wants the Legislature to approve the health exchanges as part of the state’s budget before April 1.

Cuomo spokesman Joshua Vlasto said on Monday that negotiations to include the bill in the budget were ongoing, but Senate Majority Leader Dean Skelos contradicted that yesterday, telling reporters there were “no discussions” on the exchanges at the moment.

“Obviously it’s going to come up at some point, and our position is, we don’t have the information that’s necessary concerning costs,” Skelos said.

The exchanges were originally a conservative idea with overwhelming support from small businesses across the state. But the bill’s fate hangs in the balance of two challenges to Obama’s healthcare reform law that will not be decided until long after the state’s budget deadline.

So while Cuomo insisted this month that “I’m going to do everything I can to make sure it passes,” his Department of Financial Services is pursuing an alternate bill to make comparison-shopping for health insurance easier.

“Look, the health-insurance exchange is a huge priority for this administration,” Superintendent Ben Lawsky explained. “Once the health-insurance exchange is fully established it will be easier for consumers to comparison-shop, which is one of the problems I think we identified, so that could help with that.”

The governor and legislative leaders did not include health exchanges in their talks to bundle new district lines, pension reform and an expandedDNAdata bank into a single deal.

The Republican-led Senate did not include health exchanges in its budget proposal. Instead Republican Sen. James Seward sponsored a bill to study what the health-exchange bill would cost.

The state Health and Financial Services departments are working on cost estimates for setting up health exchanges, and have received $87 million in federal grants to start the programs.

“We’re taking the attitude, with this legislation, that we want to look before we leap,” said Seward, chairman of the Senate Insurance Committee. “It’s been no secret that since last June when the health-exchange legislation was developed and negotiated, there has been a sentiment in our conference in the Senate that there are concerns about going forward.”

Seward’s bill would report its cost estimate in August, long after the year’s legislative session has ended, he said—but even if the cost is near the administration’s projections, Senate Republicans won’t commit to approving health exchanges.

He said 20 other states are still studying the cost of health exchanges, compared with the 14 that have set them up: “The approach I’m suggesting is not the least bit unusual.”

TheAlbanystalemate is a far cry from a year ago, when health exchanges passed the Assembly and seemed poised to pass the Senate, despite some Republican reservations. Cuomo suggested a special session might be necessary to approve them that summer, but Republican opposition hardened.

Cuomo now regrets the inaction—and still claims to hold out hope for health exchanges now.

“I think we made a mistake last year not passing it,” Cuomo said at a press conference in March. “I think it would be a terrible mistake this year if we didn’t pass it, and I’m going to do everything I can to make sure it passes.”