Active or Passive? That’s one of the main questions facing the architects of New York’s health insurance exchange.
Governor Andrew Cuomo issued an executive order last week to create an online insurance marketplace, after a year of fruitless negotiation with state Senate Republicans.
How the exchange will work is very much up for grabs and will be worked out by the start of 2014, when federal law requires state exchanges to be up and running.
There are two basic approaches. An exchange could work as a “passive” clearinghouse that groups insurance offerings together on a website and offers comparison tools — à la Travelocity or Orbitz — to help people choose plans. Or, it could be that and more, with the state playing an active role as a broker — recruiting and negotiating with insurers to drive down prices.
“I would think it’d be a missed opportunity just to let the exchange just become a website,” said James Tallon, head of the United Hospital Fund. “If we’re talking about a million more people purchasing insurance in New York, I think we ought to set standards to expect a good deal from the insurance carriers.”
Tallon envisions the state setting parameters for premiums, deductibles and services in a moderately aggressive way — one that won’t drive such a hard bargain that causes insurers to walk away. He also thinks the focus should not just be on getting to the lowest price, but also on giving consumers a wide variety of options to choose from.
The next 18 months will be busy ones, as state officials, politicians, insurance companies and healthcare providers jockey to shape the health exchange.
Insurance companies are not enthusiastic about the state imitating William Shatner playing “The Negotiator” from the Priceline.com ads.
“I think insurance plans sit back and say, ‘We already have our rates reviewed by the Department of Financial Services, and now we’d have to go through a second review?’” said Paul Macielak, head of the New York Health Plan Association. “How does that work?”
What happens in Washington, D.C., meanwhile, is crucial — but maybe less than some people think.
“Even if [the Affordable Care Act] is thrown out by the U.S. Supreme Court, I certainly believe in the exchange concept,” State Sen. James Seward, the Republican chairman of the Insurance Committee told WNYC. “It provides an additional market for small businesses and individuals to acquire health insurance coverage at a more affordable rate, and I believe it would be good for the insurance market in New York to have an exchange, even if the federal legislation goes away.”