In a huge preliminary win for health insurance agent's and brokers a newly introduced bill in the New York state senate proposes to retain the agent / broker role within rules establishing the state's Health Insurance Exchange.
The bill introduced by Sens. James L. Seward (R-Milford) and Kemp Hannon (R-Garden City), is the first formal proposal for creating the state’s health insurance exchange, which was mandated under the Patient Protection and Affordable Care Act (PPACA) last year.
This proposal calls for a public exchange overseen by an 11-member board who have different expertise in the health care field — among those areas: purchasing health coverage. The bill specifically mentions agents and brokers in this category and requires agents and brokers be permitted to obtain coverage for individuals and businesses through the exchange. In an unusual step the proposed exchange will also have eight regional advisory committees who will advise the exchange. It is also important that agents and brokers will be eligible to serve on these councils preserving a vital role moving forward as the health insurance exchanges begin operation.
“Insurance producers play an indispensable role in helping individuals and small business customers to navigate the complex landscape of health insurance with its many plans and options,” said Christopher A. Brassard, chairman of the Independent Insurance Agents and Broker of New York (IIABNY).
Seward, who chairs the Senate’s Insurance committee, said the legislation “allows New York to control its own health insurance destiny, preserving employer-sponsored coverage, ensuring health insurance brokers and business groups are involved in the process.
States have a deadline of January 2013 to prove to federal health officials that they are on a path to be ready.
Additional State Issues in Building Exchanges
some of the details of the health insurance Exchange, as defined by the ACA, and highlights a number of key issues for states to consider, including:
- Governance structure and administration;
- Key functions and responsibilities;
- Operation of the Exchange alongside the state’s commercial health insurance markets;
- Rules governing carrier participation in the Exchange;
- Risk selection, inside and outside the Exchange;
- The interaction between the Exchange and the state’s Medicaid and CHIP programs; and
- The type and level of customer service that the Exchange will need to provide.
Although much remains to be determined with regard to the set up of the Exchanges, state officials need to step up their planning and begin establishing the infrastructure and the policies required for the successful implementation of health reform and the operation of state-based Exchanges. Figuring out how best to position the Exchange in 50 state health insurance markets and the District of Columbia will require an unprecedented amount of collaboration between states and the federal government.
Additiona challenges the states will incur include dealing with state fiscal crises while implementing such a complex program. While information technology (IT) grants from the federal government have been made available the task of impelementing the IT infrastructure is still a major undertaking.
While there is time for the stat's to implement their Exchange(s) the challenge of creating a new program that will be self-sustaining as of 2015 is daunting. This will also prove difficult while trying to keep the Exchanges administrative fees low while satisfying the public's demand for high quality customer service. The last thing states will want in establishing the new Exchanges is widespread confusion and complexity in accessing health insurance throught these new mechanisms.
Obviously New York is not the only state that is working on implementing a health insurance exchange. Let's taka a look at a few others briefly.
Louisiana
States that have moved gingerly so far on health exchanges have not necessarily rejected the idea outright. Only one, Louisiana, has told the federal government it does not intend to build an insurance marketplace for its residents. In states that refuse, the law allows the federal government to step in.
Maryland
Maryland Governor Martin O’Malley in May 2011 established the state board that will oversee the state’s new Health Benefit Exchange, where the uninsured will go to buy coverage under health care reform. Consumers are supposed to be able to compare rates, benefits and quality among insurers. The state passed a law creating the exchange and its structure earlier in 2011.
Texas
Officials at the Texas Department of Insurance have since last fall, with the help of a $1 million grant from the United States Department of Health and Human Services, they have been working quietly to plan for a health insurance exchange. “We’ve been going full speed ahead on implementation, doing the due diligence so that we can be on time with what the law says,” said John Greeley, a spokesman for the agency.
Summary
Under the PPACA states have the option to allow the federal government to set up the health insurance exchange on its behalf if they choose. Clearly, New York state, if this bill is enacted, will chart its own path by implementing some unique approaches rather than taking the generic, federal route.
