March 22, 2012
DEPARTMENT OF FINANCIAL SERVICES: HEALTH INSURANCE EXCHANGE IS VITAL TO SMALL BUSINESS GROWTH; WILL HELP ECONOMY GROW & CREATE JOBS
Small Business Community, Insurance Brokers & Health Insurers Stand With Cuomo Administration to Urge Immediate Passage so New York Doesn’t Lose Control to Federal Government
Benjamin M. Lawsky, Superintendent of Financial Services, was joined by the small business community, insurance brokers and health insurers in calling for immediate passage of legislation included in the budget to create a New York health insurance exchange because it will be good for business and help create jobs. If the legislation is not passed now, the federal government will run the exchange and New York will not be able to make important decisions about how it operates and who it serves.
“Affordable health insurance is one of the top issues for businesses, especially small business. New York’s more than 400,000 small businesses are our engines of growth, generating two-thirds of all new jobs. Helping those businesses grow will improve the entire state’s economy. This should not be a Republican or Democratic issue — it’s about jobs,” Superintendent Lawsky said. “If New York waits any longer, the federal government will impose an exchange not tailored to the needs of our small businesses and consumers. Certification for the state exchanges begins in mid-2012 and we must be able to demonstrate we can run it by January 2013. If we don’t start building ours immediately, we will have a federal exchange in 2014.”
Last year, Gov. Andrew M. Cuomo, and the Senate and Assembly agreed to compromise language to create the exchange. The language in this year’s budget reflects that agreement. But the Senate, which agreed to create the exchange last year, has not included it in its budget this year.
The federal government will operate exchanges for states that do not create their own. That means the exchange and its jobs could be located outside New York. More important, a federal exchange may not be the best design for New Yorkers. New York requires minimum benefits and prohibits insurers from charging higher premiums to seniors and small businesses with older employees. A federal exchange operating in New York may provide fewer health insurance benefits, while charging older New Yorkers higher premiums.
“This issue is too important to too many people and businesses to let it be scuttled by politics in an election year. Let’s pass the exchange now, to help New York’s small businesses thrive and create jobs to lead our economic recovery,” Superintendent Lawsky said.
Chuck Steiner, Chair of Chamber Alliance of New York State (CANYS), which represents chambers of commerce around the state, said, “As negotiations continue related to the establishment of a Health Insurance Exchange in New York, CANYS supports the creation of a public authority that would have oversight of the exchange in New York State. We encourage the involvement of chambers of commerce, business associations and brokers as a means of distributing products within the exchange.”
Benjamin Geyerhahn, director of special projects, Small Business Majority, a small business advocacy organization, said, “Healthcare premiums are spiraling out of control and insurance plans are getting more complicated every year. As proposed, the New York health insurance exchange would reduce premium costs and make it easier for small businesses to purchase healthcare insurance. The State should seize this historic opportunity to provide relief to New York's small businesses. Unfortunately, the Senate's inaction will force federal regulators to seize control of the New York exchange, which no one wants.”
Paul F. Macielak, president & CEO, New York Health Plan Association, a health insurance trade association, said, “HPA and its member plans support the establishment of a New York exchange versus one developed under a federal model. Health plans have been a partner in the state’s efforts to increase access to affordable health insurance for New Yorkers and a state exchange allows New York to control its own destiny as we continue working toward that goal.”
Andrew F. Biernat, President, New York State Association of Health Underwriters, which represents brokers who sell health insurance, said, “We ask that all of our State’s legislators act quickly and pass legislation that will allow us to move forward in creating a New York State Health Insurance Exchange. The Empire State has always been a leader and innovator in providing our residents with quality health insurance that takes into account our State’s unique needs. If legislation is not passed soon, the Federal Government will step in and create a Health Insurance Exchange for New York, without taking into account the complexities and uniqueness of the New York State insurance marketplace.”
Vincent C. Ashton, President & CEO, HealthPass New York, which provides health insurance options for small businesses, said, “Small businesses and individuals in New York State are trapped in unaffordable, confusing and dysfunctional health insurance marketplaces that threaten their health, livelihood and future. They desperately need a Health Benefits Exchange designed by New Yorkers to meet the needs of New Yorkers, not a Federal Exchange designed to meet the needs of the mythical ‘average American’, and which is likely to be hobbled by compromise in order to insure that one size fits all states.”
A health insurance exchange will offer a choice of reasonably priced health insurance policies. Individuals and small businesses will be able to compare rates, benefits and the quality of competing plans in an open and transparent marketplace — thus encouraging insurers to offer more competitive prices and plans. And federal tax credits will help consumers and small businesses pay for coverage.
The exchange will feature a Small Business Health Options Program, which can act as a human resources department, helping employees make choices and enroll, and collecting premiums to send to insurers. Small employers can set a defined contribution toward employees’ coverage, and employees can choose from a broader range of plans.
Some opponents have raised the issue of costs, but New York State will not use any of its own funds to create or operate the exchange. Federal grants are available to support the exchange through December 2014, when under federal law, the exchange must be self-sustaining whether run by the state or the federal government. New York has already received $88 million in health exchange federal grants.