Press Release: Governor Cuomo Issues Executive Order Establishing Statewide Health Exchange

Governor Andrew M. Cuomo today issued an Executive Order to establish a statewide Health Exchange, a move that will significantly reduce the cost of coverage for individuals, small businesses, and local governments. The Exchange will be entirely financed by the federal government and will be instrumental in establishing the first-ever comparative marketplace to bring down the cost of health insurance. By lowering the cost of insurance, the exchange will also help more than one million uninsured New Yorkers afford coverage.

"The bottom line is that creating this health exchange will lower the cost of health insurance for small businesses, local governments, and individual New Yorkers across the state. The sky-high cost of insurance in New York is driving businesses out of the state and preventing lower income New Yorkers from being able to afford needed coverage,#157; Governor Cuomo said. Establishing the health exchange will bring true competition into the health care marketplace, driving costs down across the state."

If New York fails to establish an Exchange, the federal government will step in and establish a federally operated Exchange in the state, in order to comply with the Affordable Care Act. As required by the Affordable Care Act, the Exchange will be financially self-sustaining, requiring no state subsidy, by January 1, 2015.

The Exchange will allow New Yorkers to obtain health coverage and facilitate the purchase and sale of qualified health plans in this state. Additionally, the Exchange will ensure that eligible small businesses and individuals receive premium tax credits and cost-sharing reductions.

In addition, the Exchange will save New York taxpayers hundreds of millions of dollars each year by helping connect New Yorkers and businesses to health insurance that will be made available by the Affordable Care Act. Currently, state and local governments pay more than $600 million every year to cover the health care costs of uninsured individuals. Unreimbursed costs are passed on to individuals and small businesses, adding an additional $800 in premiums on a family's average cost each year.

With the Exchange and the tax subsidies that will be available as a result of the Affordable Care Act, individuals who currently buy their coverage directly will see their cost drop by 66 percent. The Exchange will also enable small businesses to cut costs. As a result of the increasing cost of health care, an increasing number of small businesses cannot afford to purchase health insurance coverage for their workers. With the Exchange, small businesses will see the cost of providing coverage to their employees drop by 22 percent.

The Executive Order allows for regional advisory committees consisting of consumer advocates, small business consumer representatives, health care providers, agents, brokers, insurers, labor organizations, and any other appropriate stakeholders to advise and make recommendations on the establishment and operation of the Exchange, including recommendations about relevant regional factors. The advisory committees will provide opportunities for public input.

Patricia Boozang of the Coalition of New York State Public Health Plans said, "We applaud Governor Cuomos leadership in establishing a health insurance exchange New York can now move ahead with building an Exchange that meets our States needs and brings more affordable coverage to New York's citizens and small business."

Joan Parrott-Fonseca, AARP New York State Director, said, "Governor Cuomo deserves New Yorkers praise today for signing an Executive Order to establish a Health Benefit Exchange for state residents. His actions will help millions of uninsured New Yorkers and their families gain access to quality and affordable health care coverage and it will clear the way for New York State to seek additional federal funding to develop the Exchange."

Karen Scharff, Executive Director of Citizen Action of New York, said, "We applaud the Governor's leadership in ensuring that New Yorkers have access to quality, affordable health coverage. During these tough economic times, access to quality, affordable health care is more important than ever. By creating New York's Health Insurance Exchange, over 1 million people who don't have health coverage will, and costs will be reduced by as much as 66% for individuals and 22% for small businesses."

Kenneth E. Raske, President of the Greater New York Hospital Association, said, "The Health Exchange is the vehicle through which over one million New Yorkers are expected to gain health insurance coverage beginning in 2014. We support the implementation of the Exchange as a way of alleviating the current crisis facing those that dont have access to care because of lack of insurance."

Donald Distasio, Chief Executive Officer of the American Cancer Society of New York and New Jersey, said, "An estimated 10,000 uninsured cancer patients across New York are waiting for relief in the form of a health insurance exchange. Thanks to this executive order from Gov. Cuomo, New York is one important step closer to offering real help. The American Cancer Society thanks Gov. Cuomo for taking bold action on the exchange."

David Klein, Chief Executive Officer of Excellus Blue Cross Blue Shield, said, "We applaud the Governors leadership in establishing New Yorks own Health Insurance Exchange that is compliant with federal law and which, if properly operationalized, will ultimately provide an affordable means to assist consumers in the purchase of health insurance. We are especially grateful for the Governors recognition of regional differences through the creation of regional advisory boards and also the need to avoid duplicative and unnecessary regulatory jurisdiction."

Elisabeth R. Benjamin, Vice President for Health Initiatives at the Community Service Society of New York and a co-founder of Health Care for All New York, said, "New Yorks families and small businesses applaud Governor Cuomo's leadership and determination to issue this important Executive Order authorizing a health insurance exchange. This is our best shot for New York to begin to curb out-of-control health insurance costs and it will help individuals, families and small businesses who are desperate to obtain affordable and better-quality health insurance."

Kevin Finnegan, Political Director of 1199SEIU, said, "Governor Cuomo is right to put in place a statewide Health Exchange that will help ensure that more than one million uninsured New Yorkers will be able to obtain affordable and comprehensive health care coverage. Because of the Governors leadership, working families and individuals across the state will see major savings. We thank the Governor for recognizing that soaring health care costs were putting an immense strain on many middle and lower class New Yorkers, and for taking the lead in launching this Exchange."

The Executive Order is below:

No. 42

 

E X E C U T I V E O R D E R

 

 

ESTABLISHING THE NEW YORK HEALTH BENEFIT EXCHANGE

WHEREAS, the implementation of a Health Benefit Exchange and other reforms in New York will: (1) result in lower premiums for individuals and small businesses; (2) allow individuals and small businesses purchasing coverage through such Exchange to receive $2.6 billion in federal tax credits and cost sharing subsidies; and (3) provide one million additional New Yorkers access to affordable, comprehensive health insurance, reducing the percentage of New Yorkers who are without health insurance;

 

WHEREAS, a state that chooses to operate its own Exchange must demonstrate to the federal government, by January 1, 2013, that its Exchange will be able to begin accepting applications by October 1, 2013, and will be operational by January 1, 2014, and if the state does not demonstrate operational readiness of its own Exchange, its residents will be required to participate in a federal Exchange;

 

WHEREAS, the State of New York is best positioned to: (1) understand the ramifications of operating an Exchange within New Yorks commercial insurance market; (2) consider the unique regional and economic needs of the States individual and small business health insurance markets; (3) account for the diversity of its population, with its ethnic, cultural and language differences; and (4) decide what benefits will be provided to enrollees in the Exchange, which health plans can participate in the Exchange, what rules should apply to the marketing of products by health plans, and how to operate the Small Business Health Option Program (SHOP#157;) for small businesses;

 

WHEREAS, the Affordable Care Act requires an Exchange to evaluate the eligibility of individuals for Medicaid and other public health coverage and enroll them if eligible, meaning that it will be essential to coordinate the operations of the Exchange with the States administration of these programs;

 

WHEREAS, the taxpayers of this State subsidize the costs associated with care for the 2.7 million New Yorkers without health insurance, who frequently forego preventive care and other needed treatment, putting them at risk of being sicker throughout their lives and dying sooner than those who have health insurance, which diverts funds from other public uses and costs state and county taxpayers more than $600 million annually just to pay for a portion of the services rendered by hospitals to people without insurance;

 

WHEREAS, New Yorks uninsured working families often earn too much to qualify for public health insurance, but not enough to purchase coverage that costs, on average, over $1,200 per month for an individual and $3,450 per month for a family of four;

 

WHEREAS, small businesses, without assistance, cannot afford to purchase health insurance coverage for their workers, nearly 800,000 of whom have lost employer-sponsored coverage over the last decade, and thus face a major competitive disadvantage that inhibits their ability to grow, create jobs and otherwise support the States economic development;

 

WHEREAS, the costs associated with care for the uninsured are shifted through increased premiums to those individuals and groups that purchase health insurance coverage, causing working families with health insurance to pay $800 more in premiums on average each year;

 

WHEREAS, the development and operation of an Exchange in New York will impose no cost on the State, but will be funded entirely with federal funds until January 1, 2015, at which time the Exchange will be wholly self-funded, meaning that no State or county taxpayer dollars will be used for such purposes; and

 

WHEREAS, it is therefore critical that the State of New York establish and operate its own Exchange, and that it do so expeditiously;

 

NOW, THEREFORE, I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and the Laws of the State of New York, do hereby order as follows:

 

  1. There is hereby established within the Department of Health, in conformity with the Affordable Care Act, the New York Health Benefit Exchange (the Exchange#157;). The Department of Health, in conjunction with the Department of Financial Services and other state agencies, shall take all necessary steps to effectuate the Exchange, and expedite its ability to perform those functions necessary to carry out the requirements and serve the goals of the Affordable Care Act.
  2. The Exchange shall, among other things, facilitate enrollment in health coverage and the purchase and sale of qualified health plans in the individual market in this state, and enroll individuals in health coverage for which they are eligible in accordance with federal law.
  3. The Exchange shall, among other things, take such actions necessary to enable eligible individuals to receive premium tax credits and cost-sharing reductions and to enable eligible small businesses to receive tax credits, in compliance with all applicable federal and state laws and regulations.
  4. The Exchange shall, among other things, enter into agreements with appropriate entities, including but not limited to federal, state and local agencies, to the extent necessary to carry out its duties and responsibilities, provided that such agreements incorporate adequate protections with respect to the confidentiality of any information to be shared.
  5. The Exchange shall, among other things, convene regional advisory committees, consisting of consumer advocates, small business consumer representatives, health care providers, agents, brokers, insurers, labor organizations, and any other appropriate stakeholders, to provide advice and make recommendations on the establishment and operation of the Exchange, including recommendations about relevant regional factors, and shall provide opportunities for public input on such matters.
  6. The Exchange shall, among other things, become financially self-sustaining by January 1, 2015, as required by the Affordable Care Act.
  7. Nothing in this Order shall be construed to duplicate, preempt, supersede, limit or otherwise restrict the statutory authority, duties and functions of the Department of Health, the Department of Financial Services or any other agency of this State.

 

G I V E N under my hand and the Privy Seal of the State in the City of Albany this twelfth day of April in the year two thousand twelve.

 

BY THE GOVERNOR

 

Secretary to the Governor

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