READY, SET, EXCHANGE!

Real Work Just Beginning for New York Health Exchange

A month ago, in what seemed like an end to a long standoff, Gov. Andrew Cuomo finally issued the executive order necessary for the state to begin setting up a health exchange, an online marketplace where individuals and small businesses will be able to buy health insurance, as mandated by President Barack Obama’s Affordable Care Act.

But with a year and a half left until the exchange is required to become fully operational, health professionals say the work to make the exchange functional is just beginning.

“They don’t really have enough time to build even the simplest exchange,” said Mark Kessler, Director of Strategic Initiatives for HealthPass, arguably the country’s most successful small-business health-exchange program.

New York’s exchange, which Cuomo’s executive order set up to be run out of the state’s Department of Health, is currently working on the physical plant of the exchange, hiring staff, from a chief executive officer to administrative support personnel. And these personnel are going to set to work designing software and a website that New Yorkers can use to purchase their health insurance, Kessler said.

“I expect that it will be somewhere between an Amazon.com and KAYAK,” Kessler said of the website.

But the big haul will actually be what comes after, said Hudson TG consultant Ben Geyerhahn, who has been specializing in the health-reform law. “The infrastructure for the individual exchange is monumentally difficult,” he said—in part because it requires the federal and state government to synchronize information across a vast array of agencies, and make that information instantly accessible.

“The exchange has to be able to instantly qualify you for Medicaid, SCHIP, and tax credits. That is a really difficult thing, because it means that every state agency which holds data necessary for those forms has to digitize them and make them accessible to the exchange,” he said.

When it becomes functional, though, the exchange is supposed to provide massive relief to small-business owners, who will be able to do things like write one check for health insurance to the state that would then be parceled out to the different providers employees were able to select from, using the exchange’s broad array of options, Kessler noted. That would lower administrative costs for businesses used to filing paperwork for individual employees, he said.

The biggest cloud hanging over the exchange presently is the threat the federal health reforms face from the U.S. Supreme Court, which is expected to rule on the mandate at the end of June, and the uncertainty created by the upcoming presidential election. Presumed Republican nominee Mitt Romney has said he would repeal the Affordable Care Act, which would potentially dismantle the exchange. But either way, that means that a lot of legitimate action on the exchange will be postponed until those two decisions are final, Geyerhahn said.

“I think there is an assumption in political and policy circles that once this election shakes out and the Supreme Court rules, that the people will begin to accept that the law is going to continue to exist or not,” he said.

In New York, exchange proponents are hopeful that even a short timetable will still enable them to produce a functional exchange. “The devil’s always in the details,” Kessler said of how well the product might turn out. The state will have to wait until January 1, 2014 to know if the system works. What seemed like a done deal a year ago when the Legislature and governor’s office agreed on the fundamentals of an exchange fell apart rapidly because of political concerns when the Senate Republicans wouldn’t pass a bill setting it up.

“A year ago in June, we had champagne on ice,” Kessler said. “That champagne is still in a fridge somewhere.”

lnahmias@cityandstateny.com

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By the Numbers: New York State and the Affordable Care Act

A look at how healthcare spending and insurance coverage for the state’s nonelderly population will change with—or without—the federal healthcare reform law in place.

14.2 million
Population covered without reform (84 percent)

15.3 million
Population covered under reform (90 percent)

$17.8 billion
Federal spending under reform

$21.9 billion
Federal spending without reform

$17.3 billion
State spending under reform

$15.0 billion
State spending without reform:

+11 percent
Change in total government spending under reform

-7 percent
Change in employer spending under reform

Source: The Urban Institute Health Policy Center