Cuomo Orders Creation of State Health Care Exchange

Governor Andrew Cuomo has issued an executive order to create a health care exchange for New York residents, a state-run clearinghouse for individuals and small businesses looking for health insurance, after the Legislature failed to act.

Cuomo had sought to create the exchanges, required under the Affordable Care Act, as part of the budget, but some Senate Republicans refused, saying they did not want to codify what opponents call “Obamacare.”

The order does not lay out details on how the exchange will operate. Typically there are two different paths the state can take. It can be an active broker, negotiating with insurance companies on behalf of the uninsured. Or it can be a passive actor, setting up a clearing house à la Travelocity or Expedia.

It did state that the exchange would not cost the state anything. Instead, it will be funded with federal dollars until January 1, 2015. After that, it is expected that the exchange will be self-funded.

Russ Sciandra, with the American Cancer Society, called the governor’s executive order a good first step.

“We’re very pleased,” Sciandra said. “It’s critical that the state get working on the health exchange.”

Cuomo says the exchanges will help uninsured New Yorkers who would be mandated to purchase health care plans. He says the exchanges will save taxpayers and small business hundreds of millions of dollars because some of their taxes already go to subsidize emergency health care for the state’s 1.2 million uninsured.

“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,” Governor Cuomo said. “Establishing the health exchange will bring true competition into the health care marketplace, driving costs down across the state.”