A research fellow at the Manhattan Institute says New York state should try to build a sustainable, market-oriented health insurance exchange program.
The Manhattan Institute, New York, is known as a conservative, free-market-oriented think tank, and some conservatives have argued that states should do their best to block implementation of the exchange program and other components of the federal Patient Protection and Affordable Care Act (PPACA) by refusing to help with implementation.
Paul Howard argues in his exchange paper that states should viewing building a health insurance exchange with a market-based orientation as an opportunity rather than a burden.
PPACA is supposed to bring an exchange system to life in 2014.
Republicans and some Democrats are trying to block implementation of parts or all of PPACA.
If the health insurance exchange provision and related provisions take effect as written, PPACA will create a new health insurance purchase tax subsidy program in 2014. Consumers and small groups will be able to use the subsidies to buy health coverage through the exchanges.
An exchange is supposed to help consumers and small groups shop for high-quality health coverage. In some states, states or exchange managers could set standards for coverage “qualified” to be sold through an exchange that might be tougher than the state or federal minimums.
Carriers would have to sell coverage on a guaranteed-issue, mostly community-rated basis. Carriers
could charge more for older insureds than for younger insureds, but they could not take individual health status factors into account.
Howard notes in his paper that New York is unusual, because it already has community-rating and open-enrollment laws, and those laws have devastated the individual market and made small group coverage much more expensive.
New York state does now how allow carriers to sell health savings accounts (HSA) in the individual market, Howard says.
In New York, setting up an exchange could be a way to remove barriers to individual HSA program sales and make rating rules somewhat more flexible, Howard says.
Howard recommends housing the exchange outside a state agency which might be subject to political pressure and building a small group exchange that would offer a defined contribution health coverage option, so that small businesses could offer employees a fixed amount of cash that the employees could use to buy coverage.