Residents of New York who buy health insurance on the state’s new health insurance exchange will pay premiums that are less than half what they had been in the past, but that wasn’t enough to stop the Republican-controlled House from voting Wednesday to delay the “individual mandate” that state officials said would produce such savings.
As Democrats touted New York’s announcement that premiums for individually purchased health plans will drop by 53 percent, and as insurers detailed such savings, Republicans scoffed at those numbers, saying they may well have been trumped up.
In other words, New York on Wednesday stood at the center of one of the most vociferous debates yet over the controversial health care bill passed by Congress in 2010, which will require most Americans to own health insurance or pay a penalty starting in January.
White House press secretary Jay Carney praised the savings in New York during his daily press briefing, saying they are one more argument for the health care reform law that has long been called “Obamacare.”
“Not only will new insurers be entering the market to offer plans to consumers, the cost for even the most comprehensive plans will be down by more than 50 percent, according to the state,” Carney said. “This is in line with what we’ve seen in other states, like California and Oregon. Competition and transparency in the marketplaces, plus the hard effort by those committed to making the law work, are leading to affordable, new, and better choices for families.”
Republican lawmakers could not disagree more. Asked about the 53 percent decrease in premiums cited by the state, Rep. Chris Collins, R-Clarence, said: “Those are not numbers that make any sense, in my book. I would want to see the real data and where it came from. It’s easy to manipulate a number to fit what you’re trying to say.”
Nevertheless, state officials stood by their numbers, saying the dramatic cut in premiums stood as proof that the much-criticized “individual mandate” and health insurance exchanges will work to the benefit of many state residents.
“New York’s Health Benefits Exchange will offer the type of real competition that helps drive down health insurance costs for consumers and businesses,” said Gov. Andrew M. Cuomo.
The state’s exchange, created under the federal health insurance overhaul, is sort of an Expedia or Travelocity for those looking for health care policies: a place where they can comparison-shop and pick the best deal. Businesses also will be able to use the exchanges to select policies for their employees.
Where insurance shoppers previously had to choose among 15,000 plans that were offered in the state, the exchange organizes the available plans into four categories – bronze, silver, gold and platinum – based on the level of benefits offered. There is also a “catastrophic” plan that offers less expensive bare-bones coverage for those younger than 30 and those who cannot afford anything greater.
The plans within each category will have standardized contract terms and product offerings to make it easier for consumers and businesses to comparison-shop for policies, the state said.
The 53 percent drop in premiums comes when the state compares the high-end gold and platinum plans to the plans that were previously available to individuals in the state, which offered roughly similar benefits, the state said.
“For the lower-cost tiers of individual coverage [silver, bronze and catastrophic], the approved 2014 rates would represent an even greater reduction than 53 percent compared with last year’s average direct pay rates – however, those plans are not directly comparable to existing offerings,” the state said.
For 2014 in Western New York, the state approved nine companies to sell insurance plans on the Health Insurance Exchange for uninsured individuals. In addition, eight companies will offer plans on the other exchange for small businesses.
HealthNow New York – parent of BlueCross BlueShield of Western New York, Independent Health, and Univera Healthcare, which is affiliated with Excellus Health Plans, will offer plans on the exchange.
Overall, the rates are significantly less than what’s currently available to uninsured individuals, for whom premiums now can exceed $1,000 a month. The rates for standard plans also vary widely, ranging from $371.87 to $834.66 a month for standard platinum plans with the lowest out-of-pocket expenses, and $221.58 to $487.45 a month for bronze plans with the highest out-of-pocket expenses. Family plans cost nearly three times as much.
Some said, though, consumers should not compare plans by price alone.
“You can’t argue that the rates are more affordable, but you have to look at overall value,” said Nora McGuire, senior vice president and chief marketing officer at Independent Health.
Individuals who receive coverage at work will see few changes. But the lower rates for the standard plans on the state’s exchange suggest that the health care law will increase access to insurance for those without coverage.
“This is a positive development,” said Donald Ingalls, vice president for state and federal relations at HealthNow New York.
It’s anticipated that New York will enroll more than 600,000 people in the first few years – out of 2.6 million uninsured in the state. Enrollment is set to begin on Oct. 1 for policies that go into effect Jan. 1, 2014. There are roughly 130,000 people without health insurance in Western New York, officials said.
Of the nine companies offering individual plans in the Buffalo area, the Freelancers Co-Op rates were the lowest.
Co-Ops are new nonprofit health insurance plans created in the Affordable Care Act, which provided loans to encourage the creation of Co-Ops to compete with other insurers.
“The exchange is equalizing things. It will make it easier for consumers to participate in insurance,” said Daniel McGowan, CEO of the Co-Op, which is sponsored by the Freelancers Union in New York City.
You didn’t hear any such praise for Obamacare, though, from House Republicans, who pushed through legislation that would delay the individual mandate for a year. The vote on the bill was 251-174.
That bill, and a companion measure codifying the Obama administration’s decision to delay for a year the mandate that many small businesses offer health insurance, are likely to go nowhere. They’re unlikely to be considered in the Democrat-controlled Senate, and even if they were to pass, President Obama has threatened to veto the measures.
Still, Republicans said it was only fair to delay the individual mandate for a year if businesses were getting a one-year break from having to provide health care.
“To me, it’s a basic question of fairness,” said Rep. Tom Reed, R-Corning. “If the administration is going to pick winners and losers, why pick employers over individuals?”
Like Collins, Reed questioned the state’s announcement that premiums would be 53 percent lower for individual health plans. He said he called the Governor’s Office to ask for details that actually showed a comparison between the previous plans and the ones that will be offered in the exchange, only to be told that such data will not be available until September.
“That, to me, is a red flag,” Reed said. “Unless I can see the plans themselves and compare apples to apples, I reject the conclusion that there’s a 53 percent decrease in premiums as a result of going to the exchanges.”
Democrats, meanwhile, lauded the state figures. “The cost-cutting influence of the conservative principles of choice and competition are manifesting themselves not only in New York, but also California,” said Rep. Brian Higgins, D-Buffalo.
As for the GOP’s attempt to delay the centerpiece of Obamacare, Higgins said: “I think people on the other side need to grow up and to help make this work here. I think what you’re seeing here is the total politicization of the health care issue that just continues and continues.”