Long Island Business News
January 10, 2014
New York Health Exchange Off and Running
by Claude Solnik
Long Island Business News takes a two-part look at health insurance exchanges, an integral parts of the Obamacare rollout with a profound effect on both individuals and the Long Island corporate environment.
Hundreds of thousands of New Yorkers are signing up for health insurance through the state’s online public exchange, which has enjoyed a much smoother go than its federal counterpart.
Since launching Oct. 1, the state exchange has helped lesser-known insurers grow and even helped create a few new ones, while it appears some larger insurance companies are content to sit on the sidelines.
As of Dec. 29, roughly 481,000 applications for coverage had been completed on the state’s insurance site, with 242,000 applicants enrolled. Providers are licensed by county, and out of the 17 insurers participating in the state’s public exchange, eight are writing policies for individuals on Long Island and three are covering small Island businesses.
Among the well-known insurers covering individuals on Long Island: EmblemHealth, United Healthcare, Empire BlueCross BlueShield and Healthfirst.
Also seizing the moment here are lesser-known insurance entities like Freelancers and Affinity Health Plan, as well as startups Oscar Health Insurance and North Shore-LIJ CareConnect, a spinoff of the North Shore-Long Island Jewish Health System.
When it comes to insuring companies, however, most of the bigger providers are sitting it out on Long Island. Only North Shore-LIJ CareConnect, Freelancers and United Healthcare have been approved to write corporate policies here.
One reason the big dogs may be avoiding Long Island commercial policies is a lack of takers. Giants like EmblemHealth, Empire and Aetna don’t even offer small-business policies, and providers who do – and are licensed to operate in Nassau and Suffolk – are reporting slow business.
“It’s mostly individuals,” noted Alan Murray, CEO of North Shore-LIJ CareConnect, which since October has signed roughly 5,000 new policies through the state exchange. “We’re getting a lot of sole proprietors and couples.
“The fact that the exchange came along hasn’t changed the fundamentals of the business for those larger insurers,” Murray added. “If you weren’t in the small business market, I don’t think much changes that makes you want to get into it going forward.”
The existence of the state exchange doesn’t necessarily serve as a magnet for major-league insurers, either. Aetna, which acquired Coventry in 2012 after filing to participate in the New York exchange, is marketing in 17 state exchanges including Pennsylvania, Texas and North Carolina – but ultimately decided not to plug into the New York marketplace.
“We were spread too thin for the investment we wanted to make in this distribution model of public exchanges,” Aetna spokeswoman Susan Millerick said. “So we decided to pull out.”
Even with limited participation by big-league insurers, New York’s public exchange is doing relatively well. Launching a state exchange was a tricky proposition, and states that opted to do so – New Jersey ultimately decided to direct residents to the glitch-ridden federal exchange, for instance – have experienced varying success levels.
“Most are doing well,” noted Bob Meissner, spokesman for Washington watchdog Families USA. “A couple are doing worse than the federal.”
One of the reasons the state exchange has experienced fewer foul-ups than the federal version has been the assistance of several trade organizations. Between October and November, for instance, the Nassau-Suffolk Hospital Council processed nearly 600 applications filed through the state exchange – and while it hasn’t tallied the numbers yet, the council says December was even busier.
The existence of a fully functioning state exchange is good news for Long Island’s uninsured and has no negative effects on local hospitals, according to Dr. Lawrence Magras, vice president and assistant medical director at Catholic Health Services of Long Island.
“I think we will have fewer uninsured,” Magras said. “That’s good for hospitals. And it doesn’t affect hospital rates at all.”
How long it takes an individual – or company, as the case may be – to sign up through the state exchange has varied. It typically takes hours, as the state site takes time to perform income verifications that determine if a customer is eligible for subsidies.
That’s slower than the time it takes on some private sites – it takes only minutes on North Shore-LIJ CareConnect’s website, which refers customers who do qualify for subsidies back to the state exchange – but faster than some of the common horror stories involving signups through the federal exchange.
While 5,000 is a modest number even for a new insurance company, North Shore-LIJ considers it a good start in what it sees as a growing online market.
“It’s brand new,” Murray said of the system’s insurance business, which now includes an East Hills storefront. “We plan on continuing to grow rapidly over the rest of the year.”