Knickman: Health care reform's next step

James R. Knickman is president and chief executive of the New York State Health Foundation, a private, nonprofit statewide foundation dedicated to increasing access to health care.

New York State needs to act now to establish a health insurance exchange. The federal health-care reform law passed last year mandates each state to establish an exchange to serve as a central marketplace where individuals and employers can access all public and subsidized private insurance options.

States can either establish their own exchange or allow the federal government to do it for them. If New York doesn't set up its own exchange and start testing it by January 2013, we could be forced to accept a federal model that doesn't fit our own unique needs, like our existing Medicaid program, the number and diversity of health plans available in the state, and our regulations governing insurance markets.

While 2013 might still seem a ways off, there are pressing reasons that New York should move ahead and authorize the creation of our exchange before the State Legislature adjourns for summer in a few weeks. Substantial sums of federal money are available to pay for the establishment of exchanges. New York may qualify for a five-year grant on the order of $100 million. The next deadline for this funding is June 30. But there's a hitch: We can only seek that level grant if the state passes exchange legislation. Without such legislation, we can only apply for a smaller, short-term grant. Given New York's fiscal pressures and escalating health care costs, we simply can't afford to let this opportunity slip away.

By establishing our exchange, we would be joining other states such as California, Maryland, Vermont and Washington, which have already taken the critical step of enacting legislation. New York is one of only 11 states that do not yet have exchange legislation enacted or pending.

Historically, New York State has been ahead of the curve in offering health care coverage for its residents. We have expanded eligibility for Medicaid beyond what was mandated by federal law, and now other states' Medicaid programs will be more in line with New York's. New York also instituted one of nation's first and most substantial child health insurance programs, Child Health Plus, which has provided free or low-cost coverage to low-income children and teenagers since 1992. The state has long dedicated resources to streamlining public health insurance eligibility systems and establishing outreach and enrollment assistance programs for public coverage. As a result, the state has been able to offer hundreds of thousands of New Yorkers access to coverage that they wouldn't otherwise have -- and now the exchange will provide us with an opportunity to ensure that a million more residents have access to coverage.

In February, the federal government selected New York as a recipient for its Early Innovator award -- one of seven states chosen for their leadership in building a better health insurance marketplace and the information technology infrastructure needed to implement health care reform. Along with the recognition came $27 million in federal funding for the design and implementation of the IT infrastructure needed for the new health insurance exchange.

Not all decisions need to be made at once. Establishing the exchange only has to identify the entity that will run it and how it will be governed. It's not the same thing as finalizing all the rules and policies that will still require attention. Those issues and details can be addressed later through a thoughtful planning process and future legislation.

With only weeks remaining on the legislative calendar, New York should continue its record of pioneering achievements when it comes to ensuring health coverage for its residents. Federal health reform provides the opportunity for 1.2 million or more currently uninsured New Yorkers to gain coverage. If the exchanges function as planned, they will expand coverage, improve the quality of coverage, and perhaps reduce costs. Those are goals that can't wait.