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New York’s Proposed Health Exchange Likely to be a New Public Authority

September 28, 2011

Federal legislation encourages states to establish Health Insurance Exchanges and offer a wide selection of coverage options to individuals and small businesses.

The states have, to date, selected several approaches for structuring these exchanges. Utah established its Exchange within an existing state agency, for example. California and Massachusetts used independent public authorities, and  New Mexico is considering establishing a nonprofit corporation.

Governor Cuomo and the Legislature have proposed structuring New York’s Exchange as a public authority. The New York Health Benefit Exchange (A. 8514, S. 5849) would be governed by a nine member board of directors, including the Superintendent of Insurance and Commissioner of Health. The remaining directors would be appointed by the governor, two by the temporary president of the Senate and two by the Speaker of the Assembly. The non-ex officio members are expected have expertise in one or more of six areas. The legislation, having passed the Assembly in the spring, is currently pending in the Senate Rules Committee.

Given the vehicles available to establish an Exchange it would appear that, particularly in New York State, a public authority may be an appropriate structure.  The strictures of the Public Authority Accountability Act of 2005, the Public Authority Reform Act of 2009, the Public Officers Law, the Open Meeting Law,  and oversight by the Authorities Budget Office, all of which will apply to the New York Health Benefit Exchange, whould help ensure that its operations would be transparent to the public and guided by appropriate considerations.

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