Insurance Companies Cautiously Optimistic about Health Exchange

With an executive order, Governor Andrew Cuomo announced Thursday he's creating an online marketplace for insurance, after months of wrangling with Senate Republicans. New York insurance plans are pleased the state is moving forward with a health insurance exchange, according to one trade group.

Paul Macielak, from the New York Health Plan Association, said an exchange could help bring insurance companies new customers.

"I think health insurance companies view the exchange as a good vehicle for cost comparison and shopping of benefits and price," Macielak said. "It’s another marketing vehicle so people become aware of your product."

Cuomo said an exchange would help provide coverage to 1 million uninsured New Yorkers. There are about 2.8 million uninsured people in the state, including 367,000 children, according to the Kaiser State Health Facts. That’s 15 percent of the state population. Nationally, 16 percent of people are uninsured.

Macielak says companies need enough people to make exchanges work — and it’s not clear if that would happen, especially if the U.S. Supreme Court strikes down the individual mandate.

"Clearly there would be less people buying through an exchange — there’s no question about that," he said. "The exchange would offer tax credits and premium assistance, so that’s still a draw for the uninsured."

New York could still have an individual mandate, even without a federal one — just like Massachusetts does — but it’s not considered likely politically.

An exchange wouldn’t be up and running until 2014, and there are many details still to be worked out and deadlines to meet over the next 18 months.