State Senate proposal leaves thorny details for later date

By CATHLEEN F. CROWLEY Staff writer
Published 12:01 a.m., Saturday, June 11, 2011

ALBANY — Leaders of the state Senate introduced a no-frills bill on Thursday that would establish the basic structure of a health insurance exchange and leave many of the controversial decisions for a later date.

The tactic may be necessary since the Legislature has only a few session days left to create the exchange in time to qualify for large federal grants.

“It recognizes that there are contentious policy and political decisions to be made about the exchange, but the key thing is to get the exchange up and running to begin to draw down some federal funds,” said Paul Howard, director of the Center for Medical Progress at the Manhattan Institute, a conservative think tank.

The exchange will be a marketplace for individuals and employees of small businesses to find a plan as part of the federal health overhaul plan passed by Congress last year.

The Senate bill would:

— Establish the New York Health Benefit Exchange as a public authority with an 11-member governing board of directors.

— Establish regional advisory committees to provide recommendations.

— Prevent general fund money from being used to finance the exchange.

— Prohibit the exchange from creating new regulations.

— Require the exchange to study various policy issues and submit a report to the Legislature by December 31, 2011.

The bill leaves regulation of the insurance plans to the state Insurance Department and Department of Health.

“We don’t have an overlap of functions here,” said Sen. Kemp Hannon, R-Long Island, who co-sponsored the bill.

With the right elements of transparency and quality indicators built into the exchange so consumers can easily compare plans, Howard said a “clearinghouse-style” exchange would be good for consumers.

“I don’t think you need additional regulatory powers in an exchange to have it work effectively,” he said.

By making it a public authority, Hannon said the new entity would be subject to the accountability and conflict of interest rules of the Public Authority Reform Act.

Questions that must be resolved in the future include: will the exchange be an active purchaser of insurance; will public health plans be part of the exchange; and will minimum standards for plans be offered?

An alternate proposal being circulated by Gov. Andrew Cuomo‘s office says the exchange should have regulatory powers, be an active purchaser, integrate public health plans and set minimum standards. But those elements could slow down passage of the bill, which the governor has yet to formally submit to the legislature. The governor’s office did not return requests for comment.

“We have pointed the way,” Hannon said about the Senate bill. “There is a good model to be had here and we are having active discussions.”

Reach Cathleen F. Crowley at 454-5348 or ccrowley@timesunion.com. Visit her blog at http://blogs.timesunion.com/healthcare.

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