How the Tri-State Area is Preparing for Obamacare

Updated: December 6, 2012 at 01:30 PM

UPDATE: Dec. 6, 1:30 p.m.

Gov. Chris Christie today vetoed the New Jersey Health Benefit Exchange Act, saying all the relevant information hadn’t been provided by the federal government.

“I will not ask New Jerseyans to commit today to a state-based exchange when the federal government cannot tell us what it will cost, how that cost compares to other options, and how much control they will give the states over this option that comes at the cost of our state’s taxpayers,” Christie said in a statement.


Across the country, states have either been diligently preparing their Health Insurance Exchanges proposals or scrambling to put them together at the last minute in order to meet the deadline, which in mid-November was extended to Dec. 14 by Kathleen Sebelius, the secretary of the federal Health and Human Services Department.

New York and Connecticut have set up health exchanges and are waiting for approval. But in New Jersey, a state with a Republican governor, the exchange is not a sure thing.

As part of President Barack Obama's Affordable Care Act, states must propose a plan for a state-run insurance marketplace, or opt out of controlling it in-state, thus yielding to federal control. AP /Jacquelyn Martin (File Photo)

The health exchanges, a key component of President Barack Obama’s Affordable Care Act, are in essence a virtual health care marketplace where individuals without insurance can “shop” for it. Various health insurance plans will compete for customers. States can opt out of setting up their own exchange, in which case the federal government will run it in conjunction with the state.

The Affordable Care Act mandates that everyone who is uninsured get coverage, either through the private market or the new insurance exchanges. Low and moderate income individuals will qualify for tax credits and other benefits, which will be administered through the state health exchange, and small employers with up to 50 employees can get coverage for their employees in the exchange.

The Obama administration will be reviewing the states’ proposals this winter, and exchanges across the country will become operational with coverage available to all who enrolled on January 1, 2014. Enrollment begins in October, 2013.


New York

The Empire State has been ahead of the curve on health exchanges. In his  executive budget proposal last January, Governor Andrew Cuomo announced the state’s intention to create a state-run exchange.

Cuomo ordered the creation of the exchange with an executive order in April, and in October, New York filed its application with the Health and Human Services department, which is overseeing the implementation of health insurance exchanges across the country.

“The bottom line,” Mr. Cuomo said at the time in a statement, “is that creating this health exchange will lower the cost of health insurance for small businesses, local governments and individual New Yorkers across the state.”

The New York Health Benefit Exchange established five Regional Advisory Committees to make recommendations based on a region’s needs and differences. The committees include: New York City, Long Island, Western NY, Central NY/Finger Lakes and Capital District/Mid-Hudson/Northern NY. Each committee includes insurance representatives, advocacy organizations and human resources experts.

Peter Constantakes, spokesman at the New York Department of Health, told North Country Public Radio that New York has taken a strong interest in creating its own health exchange.

“When Governor Cuomo came in, he said ‘let’s get underway, let’s get moving,'” Constantakes  said. “We decided we wanted to run a state exchange, rather than have the federal government run it. We thought that was important for New York. So we put the resources behind it, brought in outside stakeholders, brought in consultants to do reports, made some key policy decisions.  There’s still a lot of work to do, but we’re really confident that we’re going to have a great exchange.”

Sixteen percent of New Yorkers under age 65, or nearly 2.7 million people, do not have health insurance coverage. Under the Affordable Care Act, those people must obtain insurance.

The New York Health Benefit Exchange will be a “state-of-the art website which will make shopping for health insurance easier,” according to the site. Employees will help those seeking insurance, and the site will be the only place where small businesses can obtain federal tax credits. The state selected Oxford EPO as the benchmark plan for the exchange.



Connecticut, whose capital, Hartford, was once referred to as “The Insurance Capital of the World,” has already set up a state health insurance marketplace. The Connecticut Health Care Exchange was created in July, 2011, when Governor Dannel P. Malloy signed legislation establishing it.

About 350,000 residents in Connecticut, or a little less than 10 percent of the population, currently do not have insurance. An additional 180,000 people do not get insurance from their employer, and buy insurance on their own.

With the exchange, residents will be able to “shop for a better deal or at least give them a better array of choices,” said Jason Madrak, spokesman for the Connecticut Health Insurance Exchange, to the Hartford Courant.

“If we can get half of those people [the uninsured], we’d be happy,” Madrak said.

The goal of the exchange is to reduce the uninsured rate to about five percent the first year, two percent the following year and then “near zero percent,” reported the Courant.

And beyond being ahead of the game on setting up an exchange, Connecticut also won additional federal funds to run it. In August, Malloy and Lieutenant Governor Nancy Wyman announced a $107 million Federal Level-Two Establishment Grant from the Center for Medicare and Medicaid Services (CMS). Washington, Rhode Island, Maryland, Nevada and Vermont were also awarded the level-two grant, which funds the implementation of the exchanges.

Kevin Counihan, CEO of the exchange, told Greenwich Time that Connecticut is “on track.”

“We are not ahead or behind schedule. We are on schedule,” Counihan said. “This is a three-year project being done in 10 months.”

The Connecticut Health Care Exchange is a semi-public agency run by a 14-member board. Like in New York, committees composed of stakeholders advise the board.


New Jersey

Governor Chris Christie has yet to decide if the Garden State will create a health insurance exchange or if it will join a federally run program. Members of the state legislature approved a bill in October that would create a health insurance exchange – the New Jersey Health Benefit Exchange Act — but Christie has yet to act on it. In May, Christie vetoed a similar measure, which would help small businesses and consumers purchase health insurance.

Support for a state-run exchange has come mainly from Democrats in New Jersey. Some Republicans have said health care costs will rise if New Jersey has its own online marketplace. But Sen. Nia Gill (D-34) told NJ Today Managing Editor Mike Schneider that the cost would not increase for New Jersey because the federal government will offer hundreds of millions of dollars in subsidies.

Christie is likely to wait until the last minute to make a decision on it. Days before the original Nov. 16 deadline, the governor had not announced what New Jersey would do, saying, “There’s all different kinds of options. I’ll decide which one I think is best.”

He’ll have to make a decision soon. Christie must act on the approved bill by Dec. 6 and must indicate if the state will create its own exchange by Dec. 14.

The grassroots organization Americans for Prosperity is urging Christie to veto the New Jersey Health Benefit Exchange Act and has placed a one-minute radio ad that asks citizens to call the governor’s office to ask him for the veto.

Americans for Prosperity Director Steve Lonegan told PolitickerNJ that establishing a health care exchange in New Jersey would trigger tax penalties for businesses who don’t comply with health care mandates and will cost the state $100 million per year in operating costs. He also maintains that the exchange is a violation of patients’ health care freedom.

But health care advocate Jeff Brown, who works with New Jersey Citizen Action, told The Record that New Jersey has 1.3 million uninsured residents, and can’t ignore that fact.

“The governor’s decision is going to affect hundreds of thousands of people,” he said, adding that deciding on the type of exchange is just the first step. “Then the real work begins in terms of making sure people get insurance.”

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