Roosevelt Institute | Cornell University

NYS Hits 2 Million Enrollees on Health Exchange

By Annie BuiPublished February 22, 2015

Governor Andrew Cuomo announced earlier this month that New York State's online health insurance exchange hit 2 million enrollees, a move he deemed a "tremendous milestone." However, an annual tax on premiums purchased on and off the exchange have led some to wonder if this is counterproductive to the state's mission of making healthcare affordable for all.

By Annie Bui, 2/22/2015

More than two million New Yorkers have enrolled for health insurance coverage through the New York State of Health Marketplace, a statistic that Governor Andrew Cuomo (D-N.Y.) deemed as a "tremendous milestone" for the state.

According to a press release issued February 4 by Cuomo's office, 92 percent of those who have enrolled through the marketplace said they were satisfied with their insurance, with 84 percent reporting that they are using their coverage.

There were approximately 430,000 new enrollees through the marketplace as of last week, with a majority — around 70 percent — enrolling in Medicaid.

This year's open enrollment period began on November 15 and will end Feb. 15. Those who do not enroll by the deadline will have to wait until next year, barring special circumstances such as marriage or the birth of a child, The New York Times reported.

Though Cuomo said in the release that the numbers were a "testament" to the "progress" being made in expanding coverage to those previously uninsured, industry experts have expressed their reservations on an ‘exchange tax' proposed by the governor in his executive budget.

Under the tax, up to a $25 annual surcharge would be applied to premiums purchased on and off the exchanges. The goal of the surcharge is to offset the administrative costs of running the state's exchange, according to The Syracuse Post-Standard.

Under the Affordable Care Act, each exchange is required to be self-sustaining by the beginning of 2015. The state spent approximately $150 million operating the exchange last year.

Paul Macielak, president and chief executive officer of the New York Health Plan Association, said in a press release that the proposed tax would make insurance "less affordable" for New Yorkers.

"If affordable health coverage is the goal here in New York, the new ‘exchange tax' should be dropped and the existing state taxes on health insurance, which today total more than five billion dollars and amount to five percent of premium, be reduced," Macielak said. And, the more people that get insured, the less the state has to contribute towards charity care.

Though Cuomo said the surcharge will act as a "dedicated and sustainable revenue source" for the exchange's maintenance, the backlash surrounding the decision is justified.

Echoing Macielak, the implementation of this surcharge is counter to the overarching goal of affordable health care. Even if the surcharge tops out at $25 a year, it will be an added cost that many may see as an added financial nuisance. For example, based off the New York State of Health tax credit and premium calculator, an adult making $25,000 a year and living in Tompkins County will already be paying $64 a month for the cheapest bronze plan.

If completely eliminating the surcharge is not an option, the state might find it feasible to base the amount of the surcharge on a sliding scale, so that it is proportional to one's income and the health plan they are purchasing. This is similar to how the subsidy one receives, if they are eligible — and the premium they end up having to pay — is calculated.

The state's health exchange was established by Cuomo in April 2012 via executive order. New York is one of 16 states to establish its own website-based health insurance exchange, according to The New York Post. Other states such as California, Washington, Massachusetts and Connecticut have also implemented their own health exchanges.

More than 1.9 million New Yorkers have enrolled for insurance through the New York State of Health Marketplace.