NY Obamacare Exchange Succeeds by Offering Little Choice

Image: NY Obamacare Exchange Succeeds by Offering Little Choice A customer looks at Obamacare plan options on a government health site at the Community Service Society in New York City.

Monday, 14 Apr 2014 09:07 AM

By Courtney Coren

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The New York Obamacare exchange is one of the most successful in the country because of a decision to limit consumer choices.

New York insurance companies have to offer the same coverage on the state-run healthcare exchange as they offer to those who purchase insurance off the exchange, The New York Times reported. This meant that consumers were not very motivated to shop for insurance off the exchange.

NewYork also took other unpopular steps by banning most residents from choosing any doctors and hospitals they wanted outside a fixed network, and by banning freelancers and other independent contractors from coming together to take advantage of group insurance rates, which had been a popular practice in the Empire State.

According to Donna Frescatore, executive director of the New York State of Health, the state's exchange, premiums dropped by more than 50 percent compared to other years, as result of these tough decisions.

For example, in Manhattan, premiums went from $1,534 on average for an HMO in 2013 to $621 for similar plan.

As a result, over 900,000 people signed up for health insurance in New York for either private or government plans, 16 insurance companies were offering plans on the exchange, and most customers received subsidies and had lower premiums overall.

According to the Kaiser Family Foundation, the New York exchange was the most competitive out of seven states it looked at because it has a lot of insurance companies involved, and they all have a fairly balanced share of the market.

New York had a relatively easy time adjusting to the requirements of the Affordable Care Act because the Empire State already required insurance companies to provide coverage to individuals with pre-existing conditions and to price plans without taking into account age, gender, or occupation, the Times reported.

New York also already required that children be allowed to stay on their parents' health plans until age 30, while Obamacare has the same requirement until the child is 26.

"So in those other states, you have health plans trying to figure it out," said Peter Newell of the United Hospital Fund. "In New York, you could sidestep a lot of problems."

However, not being able to go to the doctors and hospitals of their choice has also frustrated a lot of consumers, especially those who are the most sick.

Manhattan resident Abigail List was frustrated because she had to pay $300 more a month than she would have had to for other plans so she could continue seeing her cancer doctors at NYU-Longone Medical Center.

State officials say that this out-of-network rule may change in future years.

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