This week NY State of Health, also named "The Official Health Plan Marketplace," put out a press release to celebrate a milestone.
"800,333 New Yorkers have completed their applications and 501,205 have enrolled for coverage since the launch of the Marketplace on October 1, 2013,” the statement read, adding, "Seventy percent who have enrolled to date were uninsured at the time of application.”
The press release went on to report that "New York is on track to meet or exceed its enrollment goal of 1.1 million people by the end of 2016."
The NY State of Health, The Official Health Plan Marketplace is the state-run insurance exchange established by the Affordable Care Act, President Obama’s signature social reform.
An arm of the state health department, The Official Health Plan Marketplace is a public agency. Its public servants help private insurance companies sell their product and help those eligible receive government subsidies toward the cost of the insurance. (The Affordable Care Act also aims to lower the number of uninsured by expanding Medicaid enrollment, thus the exchange also helps identify those who qualify for Medicaid.)
The cost of private health insurance with comprehensive coverage has, for many years in a row, risen much faster than wages. Private health insurance premiums have become simply unaffordable. Recognizing this, the Affordable Care Act did two things.
First, it put in place a system of tax credit subsidies for people not eligible for Medicaid, Medicare or employer-sponsored insurance. For those eligible (for example if your employer doesn’t offer health insurance) and whose incomes are below 400 percent of the poverty level (about $45,000 in annual income for a single person household), the Official Health Plan Marketplace is the official way to obtain subsidies toward insurance premiums.
Second, it established minimum coverage at 60 percent of expected costs of care, while planning to tax plans deemed to provide too much coverage, for example truly comprehensive coverage earned through union struggles with large employers.
When people shop for health insurance on the exchanges they can choose among plans that cover 60%, 70% or 80% of anticipated costs. The most affordable premiums come with high deductibles and other large out-of-pocket costs. Because employer-sponsored plans in general covered about 87% of expected costs, underinsurance will become the new normal.
The Times Union reported that "Of the total 501,205 people enrolled, the state said 276,681 chose private insurance plans, while 224,524 qualified for coverage under Medicaid, the government-sponsored health insurance program for low-income Americans.” We should note here that about 150,000 of the 500,000 people who enrolled through the NY State of Health marketplace, had insurance.
New York state has about 2,270,000 people who lack health insurance. The goal of the state marketplace is to reduce this to nearly half as many by 2017.
So far, establishing the NY State of Health Official Health Plan Marketplace has cost $429,065,407. That’s about $536 per user thus far — or about $856 per newly insured person.
If the exchanges are something of a rescue plan for an industry peddling an unaffordable product, they come at a significant cost. Curiously, the insurance marketplace idea has become a profoundly bipartisan one. It not only that the Democratic President took the idea from the Republican Governor’s health reform. Prominent Republican legislators would like to see vouchers for the purchase of Medicare — on an official insurance marketplace.
Most striking is the fact that selling insurance by itself does little to change our health system. For some individuals obtaining coverage, including Medicaid, will prove to be a Godsend.
Yet getting insurance or Medicaid does not guarantee access to necessary or comprehensive care. Not only are our health outcomes mediocre, but the experience of going to the doctor, the emergency room, the hospital is too often undignified.
The Affordable Care Act is reducing the number of uninsured, yet at the end of the day it is not a program of universal access to care. Because the major failings of the U.S. system still persist — avoidable death and bankruptcy, racial and socioeconomic disparities, the perverse incentives of profiteering, burgeoning costs — the urgency for thoroughgoing health reform has returned.
Dr. Andrew Coates practices internal medicine in upstate New York. He is President of Physicians for a National Health Program.
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