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Instead of paying for this 50 times... other states can learn from what we've done.

New York far ahead creating health insurance exchange

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Politics aside, work on creating a health insurance exchange in New York is moving forward. The state department of health has already gotten $88 million from the federal government to provide a model of how states can create these new health insurance markets.

Much of that money is being used to improve New York's information technology, to make it simple and convenient for people to choose and enroll in health plans. Julie Grant spoke with Danielle Holahan, project director of New York's health exchange planning.

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Julie Grant
Reporter and Producer

Danielle Holahan is the project director of New York’s health exchange planning. She says that New York is doing great.

“We’re awarded this early innovator status where we were supposed to blaze the trail and develop our IT systems with federal support,” said Holahan. “Instead of paying for this 50 times, let’s pay for it fewer times, and other states can learn from what we’ve done and borrow from different aspects of system. So that has allowed us to be out a little further ahead of other states.”

Holahan says that the state is moving forward by leaps and bounds to improve its IT for the health insurance exchange. “We have been working off of something I think is as old as the 1970s, and we are building what we consider a state of the art eligibility and enrollment system,” said Holahan. She compared the new system to Travelocity.

Holahan spoke about the health insurance exchange and said, “We describe it as an organized marketplace where consumers and small businesses will go on their own or either with a trusted advisor where they can easily compare their health plan options on issues like comparing benefits or the services and the price and the quality of the plans offered there. They can easily enroll in qualified health plans and, importantly, gain access to the federal tax credits that are available only through these exchanges starting in 2014.”

According to Holahan, the federal tax credits are going to help people well above the poverty line. A single adult making $45,000 a year and a family of four making $92,000 a year will both qualify for federal assistance when purchasing health insurance through the exchange.  According to Holahan, the department of health has been meeting with insurance companies, health care providers, consumers and others over the past year. However, she says that there is still a lot of work to do.

“We have a lot of choices before us of how to design the exchange. I think one of our goals is we want to have robust plan participation. I think the way this is successful is if we have a good number of plan choices and it’s attractive for individuals and small employers to enroll,” said Holahan.

The state’s goal is to enroll more than a million New Yorkers in the health exchange: about 600,000 individuals and 450,000 small businesses. Holahan said, “And that is at full implementation. It is a very robust small employer exchange estimate, and I think what we talk about there, number one, is price. I think people are very interested in what this is going to cost. And our modeling estimates do show that health reform, when fully implemented, will bring down the price of coverage for both individuals and small employers.”

Holahan says that it will also be easier than the current system, and that small employers in New York currently have 15,000 health insurance products to consider. “It represents that there is an overwhelming amount of choice today for small employers and I think it gets to a point where it’s just unmanageable. And I think we are examining, what do we think is a more reasonable level of choice in our exchange,” said Holahan. “There will be an outside market that continues even when the exchange goes live, but I think we can all agree that 15,000 is too much, and I don’t think we’ve answered the question about what is the right number of plan options.”

The state health exchange will help small businesses separate the wheat from the chaff, says Holahan. It will take some of the administrative aspects from employers which will give them more time to focus on their businesses. Holahan said, “It would make the plan choice available to their employees. They could set a defined contribution, they could decide, ‘This is what I want to pay towards coverage,’ and allow their employees to then go to the exchange and see what they want to pick using that employer contribution. So I think it could provide more choice for their workers, which should be attractive.”

In political circles, it has been rumored that small businesses are simply going to stop providing health insurance and pay the fine required. However, Holahan says that this is not true. “I think there’s a lot of misinformation around the fine. That only applies to large employers. Small employers: there will be no fine. So I think it’s really just a win-win for them,” she said. “There’s no requirement on employers to offer coverage today, yet many of them do, and it’s to attract and retain workers. This is trying to make it easier for them to do it, and it’s trying to make it more affordable for them to do it.”

Holahan says that New York still has a lot of work to do before it can open the exchange up to the public. The U.S. Department of Health and Human Services will review the state’s progress this fall and enrollment is scheduled to begin in October 2013. The actual healthcare coverage will start in January 2014. Many states have expressed concerns about the deadline, but Holahan says that she is confident that New York will be ready on time.

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