Health Care/Insurance Committee Update
June 15, 2011
- Countdown to Health Insurance Exchange?
- What’s the Conversation We’re Not Having? (Hint: Controlling Health Care Costs)
Negotiations continue between the Legislature and Governor on legislation to put in place the framework for a health insurance exchange in New York State and with the legislative calendar days numbered, it remains to be seen whether negotiations will lead to an agreed upon bill.
The Senate has introduced its bill; the Governor released earlier this week his Program Bill #12. A side-by-side of key provisions of each bill is included here. This is not intended to cover every provision of each bill, but to provide a context for the primary aspects of the bills and to demonstrate where some policy differences appear.
The Business Council is on the record as supporting a “do no harm” approach given the complexity of this issue, and the need for significantly more data than is currently, publicly available to evaluate impact, and perhaps unintended consequences. We remain committed to working with all parties to design something that works toward the Congressional vision of an exchange: a marketplace that better organizes the information to compare health plans, increased product availability and choice, and a means through which to increase coverage for individuals and small businesses.
Significant areas of concern to the Business Council include:
- Scope of Authority of the Insurance Exchange Board: We remain concerned with proposals that give an appointed Exchange Board discretionary authority that more properly rests with the Legislature and Executive. A Board which will clearly be charting new territory – not just in New York, but across the nation as these exchanges become functional – should not be given broad powers with no, to limited, opportunity for the public to inform and guide its work. This becomes of serious concern when Board composition is too small to allow broad diversity of opinion and skill sets. Public policy decisions should remain with the Legislature and Governor, not with an exchange board.
- There should be consistency between the marketplace rules inside and outside the Exchange. The objective of an exchange should not be to gain market share by skewing the market in the exchange’s favor or incentivizing adverse selection of good risks over bad risks. The federal health care reform law left the private health insurance market in place and using a health insurance exchange as a vehicle to move toward a “universal product” model through skewing definitions of group size, or the like, may have much broader unintended consequences.
- We support creation of the Small Business Health Options (SHOP) and support its operation separate from an individual exchange. While much attention has been given to the integration of Medicaid services into the exchange, little has been given to the SHOP. For businesses, this is about employer sponsored benefits. If the exchange is to have value and to serve small businesses interested in the products offered through the exchange, the SHOP needs to augment the functions currently played by HR and Benefits personnel within small businesses. We support administrative simplicity for businesses and preserving an employer's role in selecting coverage.
- No more assessments!: By federal law, the exchange must be self-sustaining by 2015. While both bills task the exchange with studying and reporting back their findings on ways to make the exchange self-sustaining, it is alarming to see the Governor’s bill specifically identify insurance assessments as one means to evaluate for funding. New York businesses and individuals already pay $4.2 billion in health insurance premium taxes and HCRA fees. We support tasking the exchange to go in the opposite direction: find a means to be self-sustaining without any hidden taxes, fees, or even better: find health insurance taxes and fees which can be reduced as a result of their work.
- It’s all about the costs: The exchange was also intended to be one way to better organize the marketplace to help make health insurance more affordable in the small group and individual market. Product choice will be essential to serve the small business market. Selective contracting may limit competition and thus product choice. More information is needed before this authority is granted to an exchange board.
- Role of the Navigator: The exchange – depending on its authority and the functions it is will be undertaking – may fundamentally alter not just the insurance product market, but how and with whom small businesses secure this employee benefit. It is important that the function of “navigator” not be narrowly construed and that it recognize the very real role insurance agents, brokers and chambers of commerce play in providing a “backroom” HR function to many small businesses.
If you have an opinion, now’s the time to let your legislator know!
Recent data included in a Kaiser Family Foundation presentation provides yet another way of looking at how poorly we do at controlling health care costs in the US. It also provides interesting food for thought when you see how they display the comparison.
It’s widely known that the United States spends much more than any other country on health care. But the Kaiser Family Foundation broke that spending down into two parts: the government’s share and the private sector’s share (both measured as a percentage of total gross domestic product), then compared the results to figures from 12 other countries that are members of the Organization for Economic Cooperation and Development. In the US, government spends more on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada or Switzerland.
Canada has a single-payer health-care system, with the government the only insurer of any note. The United Kingdom has a socialized system, in which the government is not only the sole insurer of note but also employs most of the doctors and nurses and runs most of the hospitals. And yet, measured as a share of the economy, the US government health-care system is still the largest of those measured.
Altogether, the US is spending about 16 percent of the GDP on health care. No other country even tops 12 percent.