Public Hearing New York State of Health: A Discussion on Implementation

1 JOINT HEARING BEFORE THE NEW YORK STATE

SENATE STANDING COMMITTEE ON HEALTH 2 AND THE SENATE STANDING COMMITTEE ON INSURANCE 3 -----------------------------------------------------

PUBLIC HEARING 4

NEW YORK STATE OF HEALTH:5

A DISCUSSION ON IMPLEMENTATION 6 ----------------------------------------------------- 7 Legislative Office Building

Hamilton Hearing Room B 8 172 State Street

Albany, New York 12247 9

January 13, 2014 10 10:00 a.m. to 2:45 p.m. 11

PRESIDING:12

Senator Kemp Hannon 13 Chairman, NYS Senate Standing Committee on Health 14 Senator James L. Seward

Chairman, NYS Senate Standing Committee on Insurance 15 16 PRESENT: 17 Senator Greg Ball 18 Senator Neil D. Breslin 19 Senator Simcha Felder 20 Senator Martin J. Golden 21 Senator Ruth Hassell-Thompson 22 Senator William J. Larkin, Jr. 23 Senator Jack M. Martins 24 Senator Gustavo Rivera (RM)

Senate Standing Committee on Health 25 1

SPEAKERS:PAGE QUESTIONS 2

Donna Frescatore 10 26 3 Executive Director

New York State of Health 4

Mary Morse 82 96 5 Owner

Kwik-Kut Manufacturing 6

Pamela Reese Finch 82 96 7 Public Relations Consultant

Sole Proprietor 8

Nick Fitterman, M.D., F.A.C.P. 102 129 9 Internist

Sole Practitioner 10

Andrew Kleinman, M.D. 102 129 11 Plastic Surgeon

President-Elect of the Medical Society 12 of the State of New York 13 Patricia McLaughlin, M.D. 102 129

Ophthalmologist 14 Sole Practitioner 15 Dan Colacino 133 154

Vice President 16 Rose and Kiernan, Inc. 17 Eric P. Nevins 133 154

President 18 EP Nevins Insurance Agency, Inc. 19 Jack Smith 133 154

Executive Vice President 20 William A. Smith & Son Insurance Agency 21 Bob Carey 158

Account Executive 22 Otsego County Chamber of Commerce 23 Lacey Clarke 158

Deputy Director 24 Freelancers Union Insurance 25 1

SPEAKERS (Continued): PAGE QUESTIONS 2

Mark Eagan 158 3 President & CEO

Albany-Colonie Regional 4 Chamber of Commerce 5 Maurice Isaac 158

Employee Benefits Program 6 Administrator

Delaware County Chamber of Commerce 7

Sean Doolan, Esq. 180 184 8 Attorney with Hinman Straub 187 191

Representing Blue Cross/Blue Shield 195 197 9 of New York 10 Paul Macielak, Esq. 180 184

CEO, President, and Chairman of 187 191 11 the Board 195 197

Health Plan Association 12 13 Elisabeth Benjamin 215 227

Vice President of Health Initiatives 14 Community Service Society of New York 15 James Lytle 215 227

Attorney 232 237 16 Representing Coalition for

New York State Public Health Plans 17

Mark Scherzer 215 227 18 Attorney 232 237

Representing Health Care for 19 All New York/New Yorkers for

Accessible Health Coverage 20 21 ---oOo--- 22 23 24 25 1 SENATOR HANNON: Would you take your seats, 2 please. 3 SENATOR SEWARD: Good morning, everyone, and 4 welcome to the joint hearing of the Senate Committee 5 on Health and the Senate Committee on Insurance. 6 I'm very pleased to be joining the Chair of 7 our Health Committee in the Senate, Senator Hannon, 8 and some of his Committee members. 9 I'm Senator Jim Seward, Chair of the 10 Insurance Committee in the Senate, and we have a 11 number of our members here as well. 12 We are here this morning to take testimony on 13 the current status of the implementation of the 14 New York State Health Insurance Exchange, as well as 15 the impact of the federal health-care reform, what 16 that impact is having on individuals, families, 17 small businesses, even providers and payers, here in 18 New York State. 19 And as we listen to testimony and get the 20 current status of, not only the exchange, but the 21 impact of the federal health-care reforms, we hope 22 to be looking at possible State options for filling 23 any gaps and providing any assistance, particularly 24 those who may be negatively impacted, in terms of 25 both their coverage as well as their health care. 1 Let me say that, at the outset, that in my 2 estimation, when it comes to the exchange, I think 3 New York is doing a good job when compared, 4 certainly, to the federal exchange. 5 Now, I want to say that I appreciate the job 6 that Donna Frescatore and her team is doing, and 7 appreciate the work of her staff. 8 They have been very helpful and responsive 9 when my office has called with constituent concerns. 10 With that said, there are a number of issues, 11 however, that have come to my attention that warrant 12 further discussion. 13 I also have a number of questions that still 14 need to be answered, that were not answered in 15 response to the letter that Senator Hannon and 16 I sent back in November. 17 Specifically, I have concerns with those 18 individuals, sole proprietors, and many small 19 business owners who have seen their policies 20 canceled as a result of the federal law. 21 I have seen numbers here in New York that say 22 that, reportedly, over 100,000 individuals and 23 policies have been impacted with these cancellations 24 here in New York. 25 What is happening to these individuals in 1 terms of their coverage and health care? 2 I've also heard from a number of my 3 constituents, that tell me that the cost of 4 obtaining a new policy is significantly more than 5 they were paying previous to these changes, and, in 6 many cases, is simply not financially feasible for 7 them to continue coverage. 8 We've also heard from constituents who have 9 actually signed up on the exchange, but to this day, 10 have no verification, no card. 11 What are they to do if they need to go to the 12 hospital or another provider for their health care? 13 Most of these individuals are sole 14 proprietors or work for small businesses. 15 So I'd like to explore whether or not there 16 is any way that the State can assist these 17 individuals. 18 And, of course, there are many other concerns 19 regarding other aspects of the federal 20 health-care-reform law as well. 21 And I look forward to hearing everyone's 22 testimony here today. 23 Senator Hannon. 24 SENATOR HANNON: Thank you, Senator. 25 I'll concur with what you've said, and just 1 note that this -- the statute we're dealing with, 2 the Affordable Care Act, is probably one of the most 3 major policy initiatives we've seen in our lifetime, 4 and, has a number of different aspects. Many of the 5 aspects have focused on the mechanical problems 6 involved. 7 I would hope that we would get beyond, and 8 start to get beyond, those mechanical problems, 9 important as they may be for people who don't have 10 coverage, and start to look at what the overall 11 purpose has been of ObamaCare, what populations are 12 currently being served, what populations have been 13 missed. 14 And I'm not talking the national debate. I'm 15 talking here in the state. 16 We as a Senate have twice expanded 17 Child Health Plus. We helped establish 18 Family Health Plus. We established Healthy NY. 19 We've looked towards a wider set of coverages 20 for everybody, and the question will be: 21 Has that been achieved, or, are there steps 22 that the State needs to take, to make sure that both 23 patients are well-treated, well-covered; 24 And, the providers, there's enough of them, 25 that they're accessible; 1 That the drugs that are -- people expect, in 2 terms of their modern medical needs, are taken care 3 of. 4 So those are the things that try to widen the 5 concept of where we're going; not making it a 6 political debate, but looking at it as a policy 7 initiative. 8 Thank you. 9 Sir? 10 SENATOR SEWARD: Senator Breslin. 11 SENATOR BRESLIN: Thank you very much. 12 I would concur totally with Senator Hannon 13 that this is a -- an apolitical discussion today to 14 probably the most important piece of health 15 legislation in the last 70 years, and that we should 16 look to: 17 How it's being achieved in a successful way; 18 Who we're leaving behind; 19 Are the providers sufficient? Are they being 20 taken care of, are they being supported? 21 And I think that this type of hearing can 22 have tremendous success if we look at it in a very 23 objective direct way. 24 SENATOR HANNON: Senator Rivera. 25 SENATOR RIVERA: Thank you, Senator Hannon 1 and Senator Seward as well. 2 SENATOR BRESLIN: And me. 3 SENATOR RIVERA: And, of course, Neil as 4 well. 5 Thank you, Neil. 6 [Laughter.] 7 SENATOR RIVERA: I'm -- as a Ranking Member 8 in the Health Committee in the Senate, I can say 9 that I've have a very good working relationship with 10 Senator Hannon, and I think that this is a perfect 11 example of the type of work that can be done when 12 you are asking questions about how policy actually 13 impacts the people of the state of New York. 14 There are certainly things that the 15 implementation of the Affordable Care Act in 16 New York demonstrates can be done well, as far as, 17 how care actually gets to folks, how folks can get 18 covered. 19 And I think that there's definitely a lot of 20 successes that we are going to discuss today. 21 There's also challenges as well. 22 And I think that, as we have -- as we have 23 been leading in the nation, as it relates to the 24 implementation of the Affordable Care Act, and how 25 to make sure that people get taken care of all 1 across the state, we should continue to do so. 2 And the conversations that we're going to 3 have today will, hopefully, lead us down that path. 4 So, I'm looking forward to the conversations 5 that we will have today, both, about the successes 6 that we've already had, but also about the 7 challenges that we face, going forward. 8 Thank you, Senator. 9 SENATOR SEWARD: Well, thank you all for your 10 comments, and let's get started. 11 And our first panel, representing the 12 New York State of Health, is the executive director, 13 Donna Frescatore. 14 DONNA FRESCATORE: Good morning, 15 Chairman Hannon, Chairman Seward, other honorable 16 Members of the Committee. 17 SENATOR HANNON: Would you pull the mic 18 closer to you? 19 DONNA FRESCATORE: Sure. 20 Thank you. 21 I'm Donna Frescatore, executive director of 22 New York State of Health. 23 As you all know, New York State of Health is 24 New York's official health-plan marketplace under 25 the federal Affordable Care Act. It's a place where 1 New Yorkers can shop for, compare, and enroll in 2 health insurance. 3 Since the market's launch in October, well 4 over a quarter of a million people have enrolled in 5 affordable health care through New York State of 6 Health. 7 Thank you for inviting me here today to tell 8 you about the success of -- the successful launch of 9 our marketplace, and the many New Yorkers who are 10 already receiving affordable health-insurance 11 coverage through the market. 12 As you know, in April of 2012, Governor Cuomo 13 issued Executive Order 42, establishing a 14 state-based health-insurance exchange in accordance 15 with the federal Affordable Care Act. 16 The order set in motion an intensive 18-month 17 planning and implementation process that included 18 the input of over 200 individuals across 5 regional 19 committees in our state, the completion of 15 policy 20 studies, and extensive collaboration between our 21 marketplace, our state Medicaid program, and our 22 colleagues at the Department of Financial Services. 23 In June of 2012, the Department of Health 24 contracted with Computer Sciences Corporation, or, 25 "CSC," to be the single systems integrator 1 responsible for building and operating the state's 2 marketplace. 3 We developed an adaptive and flexible system 4 that has proven that it allowed us to identify 5 issues as the system was being built, and to quickly 6 make changes and corrections when they were needed. 7 On January 31st of 2013, just about a year 8 ago, New York State of Health issued an invitation 9 to all health insurers licensed in New York to be 10 part of our state marketplace. 11 That invitation went well beyond the federal 12 requirements for health plans that participate in 13 the exchanges. 14 It required insurers to offer standardized 15 products, it required the products at each metal 16 tier, and, out-of-network benefits were required if 17 the insurer was providing such benefits outside of 18 the exchange. 19 On October 1st of 2013, we launched 20 New York State of Health's website. 21 As reported, today, there have been over 22 2.5 million unique visitors to the site, and they 23 viewed 57 million pages on that website. 24 The traffic to the website remains high, and 25 it's operating smoothly, with an average response 1 time of less than 3.8 seconds when a consumer 2 requests a next page or action on the website. 3 Although the volume remains extraordinarily 4 high, it was even higher in our initial days of 5 implementation, and that resulted in some 6 problematic wait times for consumers. 7 Our technical team responded quickly, 8 quadrupling the website's processing capacity, and 9 project leadership stayed on site to direct and 10 oversee implementation of these corrective actions. 11 As a result, on October 5th, just days later, 12 the website performance improved dramatically, and 13 it remains at those levels. 14 Our call center was also very busy. 15 Between October 1st and December 24th of 16 2013, our trained representatives answered over 17 350,000 calls. 18 As the deadline for applying for January 2014 19 coverage approached, call volume more than doubled, 20 from an average of 5500 calls answered every day, to 21 over 15,000, often at a rate of 1500 to 1600 calls 22 answered every hour. 23 To address the increased wait times for 24 customer service, and to provide better service to 25 our consumers, the customer service center is poised 1 to add representatives to the phone lines in January 2 and February of this year, as we approach the 3 March 31st enrollment deadline. 4 New York State Health is committed to 5 improving customer interactions and meeting the 6 needs of potential enrollees. 7 To date, 75 percent of applications have been 8 submitted by consumers directly through the website; 9 I think a testimony to how the website is working 10 smoothly. 11 The rate -- remaining 25 percent of 12 applications were submitted by telephone or with the 13 help of a trained assister. 14 And these assisters include about 15 570 navigators, over 2500 certified application 16 counselors, and over 3900 licensed insurance brokers 17 in New York who have been certified to work with 18 New York State of Health. 19 Regardless of the type of assister, each must 20 adhere to strict policies and procedures related to 21 privacy and security of data related to the people 22 they're helping. 23 Forty-eight organizations serve as navigators 24 throughout state, and bring with them 25 95 organizations, including thirteen chambers of 1 commerce, and each individual has completed a 2 three-day training course that's conducted in 3 person, and a written examination. 4 Like our navigators, our certified 5 application counselors, who are generally employees 6 of hospitals, federally qualified health centers, or 7 health plans provide, provide in-person assistance 8 to individual consumers. 9 While these counselors must meet the same 10 certification requirements, they are -- they do not 11 receive grant payments from New York State of Health 12 or the department. 13 Finally, recognizing the very important role 14 that licensed insurance brokers play in 15 New York State in advising small businesses, and, 16 recognizing the assistance that they can provide to 17 individuals as we enroll more people directly in 18 insurance in New York, we have worked extensively 19 with the Department of Financial Services and broker 20 organizations to develop an 8-hour 21 continuing-education course, where licensed 22 insurance brokers can choose to work with the 23 individual marketplace, the small-business 24 marketplace, or both. 25 Regardless of how consumers apply for 1 coverage, securing personal data is critical. 2 In building and deploying the marketplace, 3 the Department of Health has implemented advanced 4 security controls and processes, based on the 5 National Institute of Standards and Technology's 6 guidelines, as well as other regulatory, 7 administrative, technical, and physical safeguards. 8 These security and privacy controls enable 9 New York State of Health to monitor and continually 10 protect the privacy of information it is required to 11 collect on behalf of the enrollee. 12 Strong encryptions protect communications to 13 and from the website, and, in addition to standard 14 computer protections in place, which include 15 anti-virus and anti-malware implementation, the 16 website uses both network- and host-intrusion 17 provision mechanisms -- prevention mechanisms to 18 detect and prevent malicious activity. 19 The marketplace always encourages consumers 20 to protect their personal identification 21 information. 22 In September, prior to opening the 23 marketplace, New York State of Health issued an 24 alert to consumers, advising them that they should 25 never be charged a fee for assistance to enroll in 1 the marketplace, that they should only provide 2 information to people they know are certified by the 3 marketplace to help them, and that no one from the 4 marketplace will ever contact them unless they've 5 requested assistance. 6 Any report of potentially inappropriate 7 activity will be fully investigated by 8 New York State of Health, in conjunction with the 9 Department of Financial Services, when appropriate. 10 New York State of Health has also established 11 an approval process for those wishing to use the 12 name or logo on their materials or advertisements. 13 New York's health-plan marketplace is a 14 leader in the nation, and health insurance 15 enrollment through New York State of Health has 16 grown steadily and significantly since first opening 17 October 1st, reaching about 294,000 enrollees as of 18 just midnight yesterday. 19 But, today, I'd like to tell you a little bit 20 more about the New Yorkers who have enrolled in 21 health insurance effective January 1, 2014, and the 22 types of coverage they've enrolled in. 23 At the close of business on December 24th, 24 which was the deadline for enrolling for January 1st 25 coverage, 230,624, to be exact, people had enrolled 1 in the individual marketplace through 2 New York State of Health. 3 The enrollments include New Yorkers from 4 every county of the state, with the largest 5 percentages from Kings, Queens, Suffolk, Manhattan, 6 Nassau, Westchester, Erie, and Monroe counties. 7 Of the individual enrollment, the majority, 8 66 percent, were in qualified health plans; so those 9 are individuals who are qualifying for private 10 coverage through a QHP, as we've come to know them. 11 Sixteen health insurers are currently 12 certified to offer QHPs through the marketplace, 13 ensuring that consumers all throughout our state 14 have access and choice to different health plans. 15 Each of the 16 health plans received 16 enrollment for January 2014 coverage. 17 Additionally, all of our qualified health 18 plans, consistent with federal requirements and with 19 state laws and regulation, cover a whole range of 20 benefits, and, each of the networks must meet 21 pre-established criteria in order for the QHP to be 22 certified on the exchange. 23 So, QHP networks must include all types of 24 providers necessary to deliver the services, 25 including hospitals, choice of primary-care 1 physicians, choice of specialty physicians in each 2 specialty type, and essential community providers, 3 such as qualified health centers, among others. 4 In the event a health-plan member who has 5 enrolled through a QHP demonstrates that they have a 6 need to see a provider that is not part of their 7 health-plan's network, the health plan must approve 8 a referral to an out-of-network provider, and the 9 member will be responsible for only the amount of 10 cost share they would have paid had they used a 11 network provider. 12 That is a protection through the marketplace 13 that currently exists for HMOs in our state, and, 14 through the marketplace, has been extended to all 15 types of insurers. 16 We continuously work with other divisions 17 within the Department of Health to assess the 18 incremental demand that new enrollment is going to 19 place on our delivery system; in particular, our 20 primary-care system. 21 As we conduct that analysis, we will take 22 into consideration the important actions taken by 23 our State Legislature, including the Primary Care 24 Services Corp -- Corporation -- Corp, I'm sorry, 25 loan-repayment program, the Doctors Across New York 1 programs, and the Health-Force Retraining 2 Initiatives, all of which play a critical role in 3 making certain that all New Yorkers can access 4 primary care. 5 Of the individuals that enrolled in a 6 qualified health plan, as of December 24th: 7 53 percent are female, 47 percent are male; 8 30 percent are under the age of 35; 9 16 percent are between the ages of 35 and 44; 10 23 percent between the ages of 45 and 54; 11 And 31 percent are over age 54. 12 So that gives you a glimpse into the age 13 distribution in our very first month of enrollment. 14 Nearly 50 percent of the individuals who 15 enrolled through the marketplace for January 2014 16 coverage were uninsured at the time of their 17 application. 18 And that rate of uninsurance, it is higher 19 for those who receive financial assistance through 20 New York State of Health. 21 And speaking of financial assistance, as 22 projected, about 68 percent of individuals and 23 families who have enrolled in coverage for January 24 received assistance in either -- the form of either 25 federal tax credits or cost-sharing credits; 1 50 percent eligible for both the tax and 2 cost-sharing credits; 3 And 18 percent eligible for tax credits only. 4 The remaining 32 percent of individuals who 5 obtained coverage for January 2014 either had 6 incomes too high to qualify for financial assistance 7 under the federal law, or, they chose not to ask for 8 assistance. Nevertheless, they have benefited from 9 the, approximate, 53 percent reduction in individual 10 premium rates as compared to the rates that were in 11 effect in 2013. 12 We require every health plan that offers 13 products on the exchange to offer products at the 14 four level -- premium levels -- I'm sorry, plan 15 levels: Platinum, Gold, Silver, and Bronze. 16 Three variations of the Silver plan are 17 available, under the federal law, for people with 18 incomes below 250 percent of federal poverty level. 19 Catastrophic plans are also available through 20 the marketplace for people under 30. 21 I'm pleased to tell you today that for, 22 January 2014: 23 17 percent of individuals enrolled chose 24 Platinum plans. 25 12 percent enrolled in Gold plans; 1 12 in Silver plans; 2 39 percent in Silver plans with cost-sharing 3 reductions that actually raise the level of benefit 4 and lower their out-of-pocket costs; 5 And, 18 percent in Bronze plans. 6 Only 2 percent of enrollees, thus far, have 7 selected catastrophic coverage through the 8 marketplace. 9 Early results for the first month of coverage 10 under New York State of Health show that it has been 11 effective in reaching all New Yorkers in all areas 12 of the state, at all income levels, and at all ages. 13 As predicted, New Yorkers are receiving real 14 savings through their marketplace enrollment. 15 Senator Hannon earlier mentioned the 16 important role of Child Health Plus for children in 17 our state, and we would concur that New York State 18 has clearly been a leader in covering children. 19 So we're proud to say this morning that, as 20 of close of business on December 24th, an additional 21 16,750 children enrolled in Child Health Plus 22 through the marketplace. 23 And, in fact, today, that number has even 24 increased further, and I'm pleased to tell you that 25 about 22,000 children, as of midnight last night, 1 have joined our Child Health Plus program. 2 We think that's truly an accomplishment. 3 The majority of these children are in 4 families that qualify for some subsidies under our 5 state Child Health Plus coverage, because their 6 incomes are at or below 400 percent of federal 7 poverty level. 8 And, enrollment of children will remain a 9 priority for New York State of Health as we go 10 forward. 11 Turning now for a minute to the small 12 business marketplace, New York State of Health was 13 one of the only state marketplaces that successfully 14 launched an online marketplace on October 1st of 15 2013. 16 Our marketplace gives employers a new option, 17 and the flexibility, to select the contribution 18 rates, the plan options, that they desire for their 19 employees. And it also let's them choose to have a 20 defined contribution program, where they will 21 contribute a predictable amount each month towards 22 coverage, and their employees have flexibility to 23 choose a plan that best meets their needs. 24 Small businesses in every county of the state 25 elected to provide coverage through the small 1 business marketplace in January. 2 In January, over 5,000 employees and 3 dependents were enrolled through New York State of 4 Health, and enrollment continues for coverage 5 effective both in -- February 1st and March 1st. 6 Platinum-level plans were the most popular 7 choice among our small businesses. 8 38 percent of them selected a Platinum plan; 9 28 percent selected Gold. 10 24 percent selected a Silver plan; 11 And 10 percent selected Bronze. 12 New York has built, truly, a one-stop 13 shopping for individuals applying for 14 health-insurance coverage in our state. 15 As you all know, effective January 1, 2014, 16 New York expanded Medicaid eligibility levels to 17 138 percent of federal poverty level, making the 18 state eligible for increased federal funding to 19 subsidize both the newly-eligible Medicaid enrollees 20 and our existing childless adults. 21 Through December 24th, 61,625 individuals 22 enrolled in Medicaid through New York State of 23 Health. 24 Since New York's eligibility levels already 25 largely met the new federal standard, the expansion 1 affected single and childless adults whose 2 eligibility had previously been set at 100 percent 3 of federal poverty level under our 4 Family Health Plus program. 5 The new expansion population, thus far, 6 represents about 20 percent of the 61,000-plus 7 Medicaid enrollees who joined for January 1st 8 coverage. 9 In summary, the launch of New York State of 10 Health has been an overwhelming success. 11 We enrolled well over a quarter-million 12 people in health insurance in less than 13 three months, but we know that implementing the 14 marketplace is not a one-time task. 15 It's a continuous process of operational 16 improvements, of ongoing training, of refining the 17 products that stock the shelves of our marketplace, 18 and, with working one-on-one with consumers and 19 their representatives when they need help or have 20 questions. 21 Each and every day, the New York State of 22 Health team works to identify and implement 23 modifications that will improve the consumer's 24 experience. 25 Many of them have already been implemented, 1 and others are planned in the upcoming weeks and 2 months. 3 I know that I speak for the entire 4 New York State of Health team when I tell you that 5 we are proud of what's been accomplished, and we are 6 committed to ensuring that New Yorkers have access 7 to affordable, comprehensive health-insurance 8 coverage, and, have the consumer experience they 9 expect and deserve. 10 Thank you, and I am happy to answer your 11 questions. 12 SENATOR SEWARD: Thank you very much, 13 Ms. Frescatore. 14 And, I know we've heard from our two Rankers, 15 Senator Breslin and Senator Gustav [sic] -- but 16 the -- what -- what I'd like to also acknowledge 17 that we have with us, Senator Marty Golden, and 18 Senator Bill Larkin, Senator Jack Martins, 19 Senator Greg Ball, and, Senator Hassell-Thompson has 20 joined us as well. 21 I had just a few questions for you, and then 22 we'll get -- we'll have some others join in as well. 23 You mentioned the term "enrolled," in terms 24 of the numbers of individuals and others who have 25 actually enrolled. I assume that means, through 1 your process at the exchange. 2 And, can you walk us through, you know, the 3 entire process, you know, enrollment -- 4 DONNA FRESCATORE: Sure. 5 SENATOR SEWARD: -- and then through that 6 final step of someone actually walking into a 7 provider's door, whether it be a pharmacist or other 8 provider? 9 And the reason I ask that question, is that 10 we have -- I've had constituents who have contacted 11 me, both, on the Medicaid managed-care enrollee, who 12 had no card or verification. This individual needed 13 insulin, and so they couldn't wait, obviously, when 14 January 1 rolled around, and that was a difficulty. 15 Thankfully, your -- you know, your staff was 16 able to intervene in that one particular case, and, 17 they're continuing on a fee-for-service basis until 18 that gets straightened out. 19 And I had another constituent, on the private 20 side, who had signed up with an insurance company, 21 a John Vasalu [ph.] from Cobleskill, who -- he 22 enrolled on November 18th, but he had not received 23 any kind of verification, a card. He talked to his 24 carrier that he had signed up with. They had not 25 heard from the State. 1 And, his plight was highlighted in the 2 "Albany Business Review" at this -- earlier this 3 morning, and, lo and behold, he -- about an hour 4 ago, he called me and told me he had just received a 5 call -- that he had received, at least over the 6 telephone, a call, with his ID number, and that they 7 would be mailing it today. 8 So, I think we need to hear from -- these are 9 impressive numbers, in terms of enrollees, but what 10 happens after the enrollment period, in terms of 11 someone actually having coverage, to. 12 Go out and receive services that are needed? 13 DONNA FRESCATORE: Certainly. 14 So, individuals and small businesses can 15 elect to apply for coverage through the website, and 16 about 75 percent of individuals chose that route to 17 apply; 18 Or, with the assistance of a navigator or an 19 insurance broker, or, in the case of individuals, 20 with a certified application counselor. 21 Once their application is processed, and 22 individuals get an instantaneous response on what 23 they're eligible for, and what their tax credits 24 will be, if they qualify, they can go on to select 25 their health plan. 1 The marketplace then sends a transaction to 2 the insurer that the individual selected, and that 3 begins the process of effectuating coverage at the 4 insurer. 5 All of the insurers, as of Friday, had issued 6 invoices, and most have been issuing identification 7 cards to individuals who enrolled for January 8 coverage, for weeks now, if not months. 9 We had, of course, a very large volume of 10 enrollments on December 23rd and 24th, the closing 11 days, and some of those invoices and ID cards 12 were -- were -- followed behind that enrollment. 13 We're glad, certainly, Senator Seward, that 14 your experience with New York State of Health was 15 good when you reported those cases. 16 Obviously, not everyone would get reported to 17 us. 18 So what we've done with the insurance 19 companies, is we've worked with them, to make 20 certain that they are issuing identification cards 21 and invoices timely, and, that there are systems in 22 place to work with the health plan and the providers 23 that are affiliated with them, to make certain that 24 anyone who applied for coverage in time for January, 25 and pays their invoice, timely, has coverage 1 retroactive to January 1st. 2 SENATOR SEWARD: Do you have a number -- you 3 have the numbers, that you provided us, in terms of 4 the enrollment through your process. 5 Do we have numbers in terms of who's actually 6 paid their premium and actually have coverage as of 7 today? 8 DONNA FRESCATORE: You know, as a protection, 9 really, or a safeguard, to consumers, we worked with 10 the insurers that participate in the marketplace, 11 and have agreed upon, what I think about as a 12 rolling 10-day period to pay your invoice, a grace 13 period, which we would typically have in New York. 14 And so, for many, the very first payment due 15 date that came up would have been January 10th, just 16 last Friday. 17 But, we will have that kind of information as 18 we move forward. 19 What we want to make certain is, that if 20 there's been a delay in an individual getting their 21 invoice, through no fault of their own, that they 22 have the same 10-day protection to be able to pay 23 for their premium, and that their coverage is 24 retroactive. 25 SENATOR SEWARD: You know, under the -- 1 shifting gears, under the federal legislation, as 2 I understand it, the exchange is slated to be 3 financially self-sustaining by January 1st of 2015. 4 Is that an obtainable goal, do you feel, here 5 in New York? 6 DONNA FRESCATORE: You're correct. 7 The federal law and the Governor's executive 8 order requires the exchange or marketplace to be 9 self-sustaining in January 2015. And I think that 10 will be part of the upcoming discussions about state 11 fiscal-year budgets. 12 SENATOR SEWARD: The -- I wanted to just -- 13 just a question on the relationship between the 14 navigators and our agents and brokers. 15 The -- as I understand it, perhaps you could 16 share with us, if my understanding is correct, that 17 the navigator is only referring someone to an agent 18 or broker only upon request. 19 And my thought is, would a navigator be able 20 to make such a referral if they thought an 21 individual or a small business's circumstances, you 22 know, let's say, we're beyond, you know, the scope 23 of their, you know, working knowledge, and perhaps 24 they feel that they would need additional expertise 25 of an agent or a broker? Would that be allowed? 1 Because I think -- the reason I stress that, 2 is many individuals, small businesses, they have had 3 ongoing relationships with agents and brokers who 4 have been there advisors over the years, and, 5 particularly, and with this is -- we're on uncharted 6 waters here with this change that we're seeing, in 7 the -- with the federal health-care changes. 8 And it would seem to me that some -- the 9 navigators are great in terms of the extent that 10 they can go, but I'd like to see an -- a more 11 seamless role here for the agents and brokers. 12 Could you just describe how you see that 13 relationship, and, the ease of a navigator turning 14 an individual or a small business, "a client," shall 15 we say, over to an agent or a broker. 16 DONNA FRESCATORE: Sure. 17 As part of the planning process and some of 18 the policy work that we did around the very 19 important role of insurance brokers in our insurance 20 markets today, we wanted to be very careful not to 21 disrupt some of those relationships that had 22 pre-existed, you know, the ACA and the exchange for 23 many years. 24 And that's why we built upon the successful 25 continuing-education programs and the training that 1 was already in place for insurance brokers in our 2 state. 3 That said, our expectation for navigators is 4 that, following their training, that they're able to 5 help consumers, both individuals and small 6 businesses. 7 We have not prohibited navigators from making 8 referrals to insurance brokers when either the 9 individual or small business prefers that, or when 10 it's in their best interests. We obviously want the 11 applicant to have the type of assister that they 12 think best meets their needs. 13 SENATOR SEWARD: So nobody would prohibit the 14 navigator from simply saying, Well, I think you 15 should talk to an agent or a broker? 16 Is that what you're saying? 17 DONNA FRESCATORE: I'm sorry, could you 18 repeat that? 19 SENATOR SEWARD: Nothing -- you were saying 20 nothing prohibits a navigator from saying, I think 21 you should be talking to an agent or a broker? 22 DONNA FRESCATORE: No, I'm not aware of 23 anything that would prohibit that. 24 Nevertheless, our expectation is, that the 25 navigators would be able and capable of assisting -- 1 of assisting all the consumers that they're required 2 to, under their grants and under the federal rules. 3 We have -- we have not approved standing 4 relationships, where there's always a referral from 5 one navigator to a particular broker. We think it's 6 very important that the applicant's choice of the 7 assister they work with is part of any referral. 8 SENATOR SEWARD: Thank you. 9 Senator Hannon. 10 SENATOR HANNON: A couple of different series 11 of questions. 12 We -- you've probably heard, or will hear 13 later today, about individuals, especially 14 professionals, who have found it very difficult to 15 find plans that would be successor plans to those 16 that were canceled last year. 17 I mean, there was a story in 18 "The New York Times" about lawyers and the bar 19 association. 20 We've received a note from the letter from 21 the Bar Association of the City of New York, that 22 said many of their lawyers there cannot find plans. 23 We find different situations where 24 replacement of drugs or the replacement of doctors 25 is not able to be done. 1 And, so, I was very -- I really -- my 2 eyebrows were raised when you said you had -- in 3 your requirements to the insurers, said they should 4 have out-of-network when -- when they offer that 5 someplace else. 6 And the maybe unexpected consequences of what 7 the rules were for the exchange, was not to have 8 out-of-network allowed in the exchange; but, rather, 9 to cut it down for plans outside the exchange. 10 And as I think in your testimony, you note 11 that the places where the out-of-network is allowed 12 is basically just in Western New York. 13 And, so, we have problems with professionals 14 seeking, even if they want to pay, not being able to 15 get products for this. 16 I think there are questions of people who are 17 changing jobs, and are in between coverage, and 18 because of the lag of getting coverage in New York 19 and the exchange, that's not available; and, yet, 20 they're waiting, 60, 30 days, for a new job. 21 We have people moving between parts of the 22 state, so that there are different coverage, because 23 we do coverage by region and by county. 24 So I'm wondering in regard to, what steps can 25 be done to start to look at where we should go with 1 out-of-network coverage, and whether that be for a 2 physician, hospital, or drugs? 3 And I could go on. 4 There's a lot of other anecdotal evidence, 5 but, I mean, you're probably at the crux of getting 6 those type of questions also. 7 DONNA FRESCATORE: So the rationale for the 8 plan invitation, was that we didn't want consumers 9 to have to, you know, choose between getting their 10 tax credits or financial assistance. And we know 11 that 68 percent or so of the individuals have 12 qualified, at least for January, for that 13 assistance, and out-of-network benefits. 14 So, thus, we thought there was sort of an 15 equity or leveling of the outside markets and the 16 marketplace or the exchange by having that 17 requirement as part of the plan invitation. 18 Each of the networks for the plans that 19 certified for the exchange has been subjected to the 20 very same rules that the Department of Health uses 21 to license HMOs in the state. And then there's the 22 added protection of, for all types of insurers, that 23 if the individual demonstrates they don't have a 24 provider that meets their needs, they're held 25 harmless on any additional out-of-pocket costs. 1 Some plans came to us, their networks weren't 2 quite ready to be certified, because they did not 3 have the required providers in a particular county, 4 and those plans were not certified for offering on 5 the exchange. 6 You know, that said, we are aware that there 7 are some individuals that would prefer a product 8 with an out-of-network benefit. 9 We think that, that in the end, that strong, 10 quality plan networks is really the answer for most 11 consumers who need, both, predictability in their 12 out-of-pocket costs, need premiums that are more 13 affordable to them, particularly through the 14 marketplace, when their incomes will typically be 15 below certain levels. 16 SENATOR HANNON: Are you saying that you feel 17 that the current -- each of the current insurers in 18 the exchange has a network that's adequate? 19 DONNA FRESCATORE: Yes, each of the -- and 20 it's done on a county-by-county basis, each of the 21 plan networks has been subjected to the same 22 rigorous tests that the Department of Health uses to 23 license an HMO in New York State, to make certain 24 those networks are adequate. 25 SENATOR HANNON: What about the standards 1 that the Department of Financial Services uses to 2 license insurers -- health insurers under their 3 certification? 4 DONNA FRESCATORE: Those as well; although 5 it's my understanding that the Department of Health 6 HMO, because those are generally closed network 7 products, is actually a more rigorous test. 8 SENATOR HANNON: Rigorous test for providing 9 adequacy? or numbers? 10 DONNA FRESCATORE: As far as, in terms of, 11 not only the number of providers in the plan 12 network, but, also the choice of providers in the 13 plan network, and other tests. 14 So, in the -- in situations where a health 15 plan could not demonstrate, to our satisfaction, 16 that they had an adequate network in a particular 17 county, they were not certified for the marketplace. 18 That would be the same way that an HMO review 19 would work, or an HMO's request for an expansion of 20 service area, through the Department of Health 21 process. 22 SENATOR HANNON: I had thought, under the 23 executive order, that there was joint governance of 24 the exchange, and things that were the specialty of 25 the Department of Financial Services were done by 1 them, and things that are specialty of the 2 Department of Health were done by them. 3 I didn't realize that you were only using 4 adequacy of network under the Department of Health's 5 rules. 6 DONNA FRESCATORE: The -- there are areas 7 where there was joint review of the applications. 8 The Department of Health took the lead in the 9 provider-network review for the applications. 10 But I don't think that, you know, which of 11 the agencies conducted the review has in any way 12 impacted the adequacy of the networks available to 13 the people who enroll through the marketplace. 14 SENATOR HANNON: Okay, thank you. 15 We'll continue to look at that. 16 Let me ask you, since you got into numbers, 17 I just wanted to go through some of the numbers 18 here, because I wasn't aware, until this morning. 19 You talked about, the total number enrolled 20 in an individual coverage in New York is 230,624, 21 and you said 66 percent of them went into qualified 22 health plans. 23 So that would be 152,211, if any 24 non-Common Core math works. 25 [Laughter.] 1 SENATOR HANNON: So that's 152,000 that are 2 going into non-Medicaid. 3 I presume the rest of the individuals, this 4 other 78,000, are going into Medicaid? 5 DONNA FRESCATORE: Some portion of -- those 6 numbers are for the people who enrolled by 7 December 24th. 8 SENATOR HANNON: I'm just taking it from your 9 statement. 10 DONNA FRESCATORE: Yeah. 11 So, there's a portion of those individuals 12 who -- I think your math is absolutely correct. 13 So, within the 230,624, about 68 percent of 14 them are individuals who enrolled in qualified 15 health plans, either with or without financial 16 assistance. 17 There's a percentage of those individuals who 18 were children who qualified for CHP, because the 19 marketplace is, likewise, enrolling children in the 20 CHP program if that's the best option for the 21 family. 22 And then, the remainder, about 27 percent or 23 so, were Medicaid. That's the 61,625. 24 So we have one front door where individuals 25 apply through the marketplace. 1 And then, depending on their income, their 2 family composition, if they're eligible for 3 Medicaid, they're enrolled in our state Medicaid 4 program. If their children are eligible for CHP, 5 they're enrolled in CHP. 6 And if they're eligible to enroll in a QHP, 7 whether they get tax credits or cost-sharing 8 credits, or not, they're enrolled into a QHP 9 product. 10 That's really the seamless front end that we 11 had envisioned throughout our entire planning 12 process for the state. 13 We don't say to someone -- 14 SENATOR HANNON: I'm trying to get at some of 15 the numbers. 16 DONNA FRESCATORE: Okay. 17 SENATOR HANNON: So that -- we agree that 18 152,211 went into qualified health plans, which is 19 non-Medicaid. 20 DONNA FRESCATORE: That's right. 21 SENATOR HANNON: And then you also, later in 22 your statement, said, half of those never had 23 insurance before, or -- I'm sorry. You said half of 24 those were uninsured. 25 DONNA FRESCATORE: Half of the individuals 1 were uninsured. 2 SENATOR HANNON: Who went into the private 3 plans were uninsured. 4 DONNA FRESCATORE: That's right. 5 SENATOR HANNON: So we've now offered, so 6 far, about 70 -- insurance, for people who had 7 previously been uninsured, to 76,000 people? 8 DONNA FRESCATORE: I think that's the correct 9 logic for the math. 10 The percent of people who qualified for 11 Medicaid, that were uninsured at the time of 12 application, was slightly higher, but, that's a 13 separate number. 14 SENATOR HANNON: So, my interesting point to 15 you would be, this state had CHP, 16 Family Health Plus, and Healthy NY. 17 And the last time I could find numbers for 18 Healthy NY, we had about 170,000, according to their 19 annual report in 2010. 20 170,000 were enrolled in Healthy NY. 21 Now, that's individuals and group. 22 But, my point and my contrast is, that was a 23 significant number of people who had received 24 insurance in this state, and I contrast that with 25 the 76,000 we've just gotten now under the ACA. 1 DONNA FRESCATORE: So my understanding of the 2 most recent Healthy NY enrollment would be that 3 there were about 88,000 people who bought as 4 individuals or sole proprietors under Healthy NY. 5 If those individuals completed the 6 application for the marketplace, they, presumably, 7 would respond to a question that they had insurance 8 at the time they applied, and be part of the 9 other -- 10 SENATOR HANNON: Well, I'm just contrasting 11 total numbers of enrollment: 170,000, versus the 12 76,000. 13 DONNA FRESCATORE: Yeah, I think that you're 14 applying the percentages correctly, Senator. 15 I would point out, however, that, you know, 16 the marketplace is truly a new option, and, not all 17 people who will enroll in health insurance will 18 enroll through the marketplace. 19 Insurers and brokers will work directly with 20 individuals, and small businesses as well, to enroll 21 people in coverage directly. 22 So I think that's another important component 23 if we were to look more broadly at the number of 24 people, and the transition of insured, from one 25 product through another. 1 The marketplace is one piece of enrollment. 2 SENATOR HANNON: Okay. 3 And in terms of the Medicaid expansion, just 4 the way I looked at the number, where you had 78,000 5 going into Medicaid, and you said 20 percent of 6 those were as a result of the Medicaid expansion. 7 So we've enrolled in the Medicaid expansion 8 population, 15,680. 9 DONNA FRESCATORE: Yeah, the total Medicaid 10 enrollment for January -- 11 SENATOR HANNON: No, this is just the 12 expansion population -- 13 DONNA FRESCATORE: Right. 14 SENATOR HANNON: -- which was the option the 15 State took under the Affordable Care Act. 16 DONNA FRESCATORE: Right, so the numbers 17 would be 20 percent of 61,625. 18 SENATOR HANNON: So it's even smaller than 19 I had. I had 20 percent of the 78,000. 20 DONNA FRESCATORE: Right. 21 If -- when we think back to some of the 22 initial projections that were done on enrollment, at 23 full implementation, the expected number of people 24 who would be newly eligible, because Medicaid levels 25 were -- because Medicaid already covered hundreds of 1 thousands of childless -- single and childless 2 adults in New York, those projections were, that 3 about -- at full implementation, about 75,000 or so 4 people would enroll in Medicaid, over time. 5 SENATOR HANNON: One point, when I mentioned 6 the bar association, part of their part -- analysis 7 of the Affordable Care Act, was that their -- the 8 definition for an "individual" had changed. 9 Before, you could get coverage if you were -- 10 there were two people together. 11 Now, those two people have been split into 12 two individuals, and, the two individuals often wind 13 up paying more than they had been paying before. 14 Now that had been a change in the New York 15 law, or because of New York law. 16 And I was just wondering if you have any 17 policy recommendations to go back to where we had 18 been. 19 DONNA FRESCATORE: So my understanding is, 20 that the way we're determining, or the definition 21 of, "sole proprietor," for the purposes of the 22 marketplace, is consistent with the federal rule, 23 and that we're applying -- we're applying the rules 24 as they're defined in that federal requirement. 25 SENATOR HANNON: But, still, this state, we 1 passed legislation in the year -- what'd they call 2 them? -- RHIOs, or -- PEOs" (professional employees' 3 organizations), that allowed people to join and 4 still get the benefit of group rates. 5 So I'm just wondering where the marketplace 6 is gonna go as we try to find coverage for people 7 who previously had it. And these are not people who 8 are going to get subsidized, they're not going to 9 get tax credits, but they're still looking for 10 products that will offer them the coverage. 11 And the last thing I have to say is, I've 12 looked for -- I was looking for an -- I understand 13 it's federal, the Spanish website. 14 You have Spanish materials, but you don't 15 have a Spanish website. 16 And in terms of the population of New York in 17 need of insurance coverage, we really need to move 18 that forward. 19 And I wonder, at some point, will you get 20 some good news from the federal government when they 21 will take the rest of what you -- you can only do so 22 much with a website. You need their hub in order to 23 operate. 24 When are they going to come up with a Spanish 25 website? 1 DONNA FRESCATORE: We agree, that consumers 2 should have a website that's translated into 3 Spanish. 4 Excuse me. 5 We invested, you know, and focused on the 6 technology to launch the marketplace, and, that 7 investment has paid off, because our website never 8 crashed. 9 There were people who had long wait times, 10 but, people -- it never went down entirely. 11 And since early October, four days into it, 12 it's been running smoothly, as evidenced by the 13 number of people who are enrolling through the 14 website alone. 15 We are working on a Spanish website. 16 And while I can't give you a specific date 17 today, it is something that we agree that should be 18 made available to consumers, and we'll get that 19 done. 20 SENATOR HANNON: Thank you. 21 SENATOR RIVERA: First of all, on that last 22 point, (speaking Spanish), very much in agreement 23 with him, as soon as we can have it, that would be 24 excellent. 25 First will be a brief kind of parochial, and 1 I'm sure that we'll speak later, because there is a 2 breakdown that you have of where folks have signed 3 up, so I'm sure that if I give you, maybe, a list of 4 ZIP codes from my district, I could have a sense of 5 how many folks have signed up in the Bronx? 6 DONNA FRESCATORE: We can get you that 7 information. 8 SENATOR RIVERA: Thank you. 9 I know that there were -- that we had a -- 10 2016, the goal was to have 1.1 million folks -- or, 11 the projection, was to have 1.1 million by 2016. 12 According to the numbers that we just 13 discussed, we're about 294 grand, I think just said. 14 So I think we're on track to be able to do 15 that; correct? 16 DONNA FRESCATORE: Yeah, we believe we're on 17 track, and maybe a little ahead of where we thought 18 we would be, based on the projections, at this 19 point. 20 SENATOR RIVERA: And as far as the population 21 of, you know, quote/unquote, young invincibles; that 22 35 -- "under 35" folks, according to some of the 23 numbers that you gave, about 30 percent. 24 So, a third of the folks that have signed up 25 are from this -- from this younger population. 1 There's been a discussion, nationally, about 2 the fact that there is a need for healthier 3 individuals to be part of the exchange to make sure 4 that it works. 5 Is that a percentage that, for lack of a 6 better term, is at a healthy percentage to have as 7 the total breakdown of folks that have signed up? 8 And, do you think that that would be -- that 9 will make the exchange work well? 10 DONNA FRESCATORE: Yeah, we believe that 11 these early results for January, for the first 12 month -- effective month of coverage, show that 13 there is broad awareness and interest among younger 14 adults in signing up for coverage through the 15 marketplace. 16 We have, and we will continue our efforts, to 17 reach out to younger adults, to reinforce the value 18 of being insured, of having the, you know, security 19 and protection that insurance affords us. 20 And we expect that, over time, that number, 21 that percentage, will, in fact, even increase. 22 SENATOR RIVERA: All right. 23 That's all I have. 24 Thank you. 25 SENATOR SEWARD: Senator Larkin. 1 SENATOR LARKIN: Good morning, thank you. 2 A well-prepared document. 3 I have 309,000 people in my district. If 4 they didn't know anything about health or insurance, 5 they would have said this would be an Academy Award. 6 And I'm not being insulting, but I'm confused 7 when I look at the state and the federal government, 8 when we're talking about people, like, Let's go on 9 your website. 10 I have thousands of people who don't have a 11 computer, don't have a website. 12 I did a survey over this weekend. 13 Everybody I was asking, the biggest complaint 14 is: I can't have the doctor I want. 15 "Out-of-network" is not an explained 16 situation. 17 The other thing I think about is, Friday 18 night, a 73-year-old colonel from the United States 19 Army moving to Florida, said: I got a great policy. 20 It's $175 more than last, but my daughters are very 21 disturbed, because I'm authorized two mammograms a 22 year. 23 SENATOR SEWARD: That would be interesting. 24 [Laughter.] 25 SENATOR LARKIN: Now think about it. 1 Somebody, along the line, I understand what 2 you're trying to do, and I appreciate it, because 3 I believe health insurance is an necessity, not a 4 nicety. 5 But I'm concerned that, I think there's money 6 being spent in wrong ways. 7 We talked about navigators, and all. 8 I looked at the 900 form of the society of 9 New York, where they're paying their head guys 10 600,000. 11 They're going to come up to my district. 12 That was back in September. 13 Of course, they haven't found a way to 14 Orange County yet. It's too small of a county. 15 The other thing is, is the Spanish. 16 I have a district that has tremendous 17 Spanish-speaking people. Wonderful people. 18 I have parts of three counties. 19 Rockland County, they make up for 2,000 of 20 the residents. Most of them are in my district. 21 And they're saying is that, there are inadequate 22 numbers of persons who can translate for them. 23 Now, you have better books than I do, but I'm 24 telling what the people on the street are saying. 25 Does anybody know how much we spend on 1 navigators? 2 DONNA FRESCATORE: Certainly. 3 The awards for the navigator program are 4 about $27 million a year. 5 It supports about 570 or so full-time 6 individuals throughout New York State. 7 Taking, collectively, the navigators, I can't 8 specifically to Rockland County, but I can get 9 that -- I will get that information for you, 10 Senator Larkin. 11 Collectively, the navigators speak over 12 40 different languages, and we've made available a 13 site directory. 14 You can get it on the website. We understand 15 not everyone has access to the website. You can 16 call and we can get it to people. We can get it to 17 your district offices. 18 And that directory shows what languages are 19 spoken at what locations, so people can see which 20 navigators. 21 Additionally, on language access, our 22 customer service center is prepared to assist 23 callers in just about every possible language. 24 They have over 60, I think 65 or so, 25 representatives who are Spanish-speaking. And, they 1 use language-line services if they need additional 2 languages or additional resources. 3 Likewise, our materials are translated into 4 seven different languages, including Spanish. 5 So far, you know, the call center has handled 6 over 20,000 calls in languages other than English. 7 It's an important feature of the program. 8 We know the website isn't going to be the 9 answer for everyone, regardless of, you know, 10 their -- of language. It's just not an option for 11 everyone. 12 SENATOR LARKIN: We realize that, but we're 13 talking about the person on the ground. That -- 14 that's the one person we're trying to get to. 15 And in my honest opinion, I think our 16 communication is not up to date as it should be. 17 Remember, the age group, and I can speak for 18 them, because I'm going to be 86 years old in less 19 than 20 days. 20 But I'm saying, I talked to many, many 21 seniors, and they're confused. 22 Number one, is the out-of-network. 23 Number two, is the communications between the 24 individual. 25 I've had people tell me over the past month 1 that they've been on a the phone over 12 hours, over 2 a couple of days. 3 And there's no -- there's something missing. 4 It could be the person that's telling me the 5 story, versus the person who's receiving it, but 6 something is missing there. 7 You might not see it when you look at 8 19 million people, but when I look at 309,000 people 9 that I talk to frequently, not once in a blue moon, 10 the questions are serious. 11 Out-of-network, no communications, and lack 12 of plans that are not adequate to the individual. 13 And I thank you for appearing here today. 14 SENATOR SEWARD: Thank you, Senator Larkin. 15 Senator Golden. 16 SENATOR GOLDEN: Thank you. 17 If you could put your mic a little bit closer 18 to you, please? 19 DONNA FRESCATORE: Certainly. 20 SENATOR GOLDEN: Thank you. 21 The -- I think we're all a little concerned 22 about the out-of-network issue. 23 And, there was an article back in "The 24 Times," back on October 18th, about a young girl 25 that had a heart issue, 9-year-old D'Andrea. 1 Miss D'Andrea. 2 And, she went in, and the hospital told 3 them -- they took their insurance, and, they had no 4 idea, the number of people that were in the 5 operating room, and how many doctors were 6 out-of-network. 7 And they got additional bills for all of 8 those out-of-network anesthesiologists, 9 out-of-network doctors, and, it was pretty 10 overwhelming. 11 So, there are two areas here: 12 One, obviously, is in the -- when there's an 13 emergency and you're put into an emergency 14 situation, and you're going into the emergency room, 15 and whatever doctors are there, obviously, are going 16 to work on you. 17 There's also the secondary, where you can 18 actually plan to go into a hospital, and you can 19 actually take a look at the doctors that are in your 20 network. 21 But, we don't have a list of those doctors in 22 the network, do we? 23 And -- number one. 24 Number two: How do we go and take care of 25 these different issues, when they go into an 1 emergency room, or in a planned situation, and there 2 are doctors that go into the operating room or into 3 the -- or the anesthesiologist, that's 4 out-of-network? 5 How is that being dealt with? 6 DONNA FRESCATORE: So, thank you, 7 Senator Golden. 8 The network's information for each of the 9 plans is available. It's on the website. 10 We've also, since we launched New York State 11 of Health, made a tool available to consumers, as 12 they're applying for coverage, so that they can 13 enter the name of the physician that they desire and 14 they can see the affiliations with different health 15 plans. 16 In an emergency situation, all of the plans 17 that are certified on the marketplace, consistent 18 with, both, federal, and I think state rules, if a 19 person believes they're having an emergency, they 20 seek care, it doesn't impact their benefit, whether 21 that hospital is participating or not participating. 22 They're just responsible for -- there's no 23 prior-authorization requirement from the health plan 24 to get those services, and, those services are 25 treated as though they're inpatient. 1 For scheduled procedures and admissions, 2 these plans generally require the use of an 3 in-network provider, unless the plan has approved an 4 out-of-network referral because the plan can't meet 5 the individual's needs. 6 SENATOR GOLDEN: So let me -- in an emergency 7 situation, the network would cover it? 8 Is that what I'm understanding? 9 DONNA FRESCATORE: In an emergency situation, 10 the provider is -- would be covered. There's no 11 prior authorization, so we don't have people, in 12 emergency situations, where they have to call their 13 health plan, and ask or worry about whether they're 14 seeing a network provider or not. 15 SENATOR GOLDEN: And in a non-emergency 16 situation, where you have a hospital that's -- any 17 one of them -- NYU, Presbyterian, any one of those 18 hospitals, when you're going in for a serious 19 operation, a heart operation, you can have as many 20 as five, six, seven doctors in the room. 21 There could be three, four, that are 22 out-of-network. 23 How would they know? 24 DONNA FRESCATORE: Again, the networks are 25 available. 1 We always encourage a consumer to ask the -- 2 their physician whether or not they're in their 3 health plan's network, or not. Or, ask the health 4 plan. 5 And, you know, I think there have been some 6 particular situations that have been brought to us, 7 questioning whether or not a particular institution 8 or a provider participates in the network. 9 And when we've been able -- when we've looked 10 at that network data, and, in fact, including the 11 hospital that you raised, the facility does, in 12 fact, participate with some of the plans. 13 That's something we've made available to 14 consumers while they're picking their plan, because 15 we want them to have that information while they 16 select. 17 SENATOR GOLDEN: So it would be up to the 18 consumer, if the individual were to go have an 19 operation, and in that operating room, we're looking 20 at six doctors, two anesthesiologists, three nurse 21 practitioners, and then, of course, a whole series 22 of after-care, another series of doctors, that would 23 come in and out of the room over a period of time? 24 So, it would be up to the provider -- to the 25 individual seeking that insurance, to make sure that 1 each one of those individuals were in and part of 2 the provider that was being in the network? 3 DONNA FRESCATORE: It would work as it does 4 today, in today's insurance markets, that -- 5 SENATOR GOLDEN: I'm sorry? 6 DONNA FRESCATORE: It would -- we would 7 always encourage the consumer to have a discussion 8 with the providers, and, to determine their network 9 affiliation. 10 That's the same advice we give consumers 11 today outside of the marketplace coverage. 12 SENATOR GOLDEN: So it would be up to the 13 consumer to make sure they understood, how many 14 doctors and how many people were going to be in the 15 operating room, and how many in after-care, and what 16 your PT would be after that, and how that would be 17 taken care of, which could involve as many as 18 25 people? 19 DONNA FRESCATORE: Right. 20 And that information is also available 21 directly from the health plan on their website. 22 It should be available from the health plan's 23 customer service staff as well, can answer very 24 specific questions about particular doctors or 25 physical therapists and their participation. 1 SENATOR GOLDEN: Now, what about these larger 2 hospitals, some of them take one or two plans, three 3 plans, and then you have other networks that, 4 other -- hospitals that take many plans? 5 Is there any -- anything in process to try to 6 get these hospitals to take more plans? Or is it -- 7 how does that work out? 8 If you have two hospitals that only take 9 two plans, that, obviously, limits the amount of 10 people that can go into those hospitals that deal 11 with acute cases. 12 Do we have any way of working with that? 13 DONNA FRESCATORE: The criteria for approving 14 the plan -- or, certifying the health-plan networks 15 has a requirement for hospitals. 16 And, depending on the location, I mean, 17 there's some counties in the state where there may 18 be only one hospital. 19 In other areas, such as in your district, the 20 requirement in the number of hospitals is higher. 21 But, the agreements between health plans and 22 providers are private contracts, as they are today, 23 and, they are negotiated and changed from time to 24 time. 25 Also, as you look at the network composition 1 of each of the plans and the marketplace, it was not 2 our intention, ever, that they be exactly the same; 3 but, rather, that there be some variation in the 4 networks, and, that consumers would have a choice, 5 often at different price points. 6 SENATOR GOLDEN: The -- just, again, on 7 D'Andrea, Miss D'Andrea, I think they call that 8 "balance billing," right, where the out-of-network 9 makes up the difference on what they were not paid 10 for because they were out-of-network. 11 Are there other states dealing with the 12 balanced billing? 13 And, is the federal government have an 14 approach on balanced billing? 15 And, what are we going to do here in the 16 state of New York, with balanced billing? 17 Or, do we have a plan to do anything with 18 balanced billing? 19 DONNA FRESCATORE: You know, I'm not certain 20 that I'm the best person to answer that question. 21 I think that -- I'm not aware that the 22 federal government has a policy on that. 23 I think there are some other states that have 24 processes when there is a balanced bill from a 25 provider that's out-of-network. 1 SENATOR GOLDEN: So they would still be 2 allowed to get their dollars, if they had not done 3 their homework. 4 Those out-of-network doctors would be able to 5 make up that balance by charging the individual, 6 out-of-pocket. 7 Correct? 8 DONNA FRESCATORE: In an out-of-network 9 situation, yes. 10 The individual would file a claim to the 11 insurer, and there may be an unpaid balance from 12 that bill. 13 But I'm not -- I don't know I'm not the 14 person to speak to, you know, a survey of the other 15 state policies on that. 16 SENATOR GOLDEN: Do we have a lot of doctors 17 today starting to opt out of Medicaid and opt of 18 this affordable plan -- affordable health-care plan? 19 DONNA FRESCATORE: You know, we've -- we 20 collect network data for the marketplace. We do -- 21 we've changed that to be quarterly, and with the 22 goal of collecting information from the health plans 23 on a monthly basis, as we move forward here. 24 And there are some changes, as there are 25 today, in the usual course of business, from month 1 to month, in the provider network. 2 But, thus far, what we've seen, you know, 3 overall, is that while there's some adds and some 4 subtracts, that all of the networks exceed all of 5 the adequacy standards that were set forth at 6 certification. 7 SENATOR GOLDEN: I see a number of doctors, 8 it's in Manhattan; specifically, New York City, they 9 opt out. They have their own special concierge 10 plans today, but you never seen that in the outer 11 boroughs or in Upstate New York. 12 I see a number of doctors now starting to opt 13 out in my community. 14 I see that as a problem, coming forward. 15 You don't see that as a problem here in the 16 state? 17 DONNA FRESCATORE: Well, you know, we will -- 18 I don't know that I foresee network adequacy as a 19 problem, but, that is -- we will be collecting 20 information quarterly, and then monthly, to be able 21 to see if there's changes in the number of 22 physicians or specialists available to consumers 23 when they enroll in the marketplace coverage, going 24 forward. 25 SENATOR GOLDEN: Businesses: The -- 1 Senator Hannon had pointed out the number of 2 businesses across the state. 3 I think, in your testimony, it's around 4 5,000 businesses have joined. 5 Are these businesses -- which program are 6 they choosing? 7 And, are they -- is there a savings here on 8 these small businesses? 9 And, why is the number so low on small 10 businesses? 11 DONNA FRESCATORE: The small businesses 12 are -- represent businesses from all over our state. 13 The small-business marketplace is an option 14 for small businesses. 15 They still can purchase insurance directly 16 from an insurer, or with the assistance of a broker 17 and the outside market. 18 There are savings to small businesses through 19 the State, through the small-business marketplace, 20 because it's the only point of access for 21 small-business tax credits. 22 So, small businesses that meet the federal 23 requirements, they have fewer than 25 employees, an 24 average wage of $50,000 or less, not including the 25 owner's wages, and, that contribute 50 percent 1 towards the cost of coverage, can qualify for tax 2 credits when they buy through the small-business 3 marketplace. 4 We expect, over time, that more -- that the 5 enrollment through the small-business marketplace 6 will increase because of the tax credits that are 7 available, and, because the flexibility that's built 8 in, to -- for the employer to make different choices 9 about what they contribute, and what plans their 10 employees have access to. 11 SENATOR GOLDEN: God forbid any of these tax 12 credits expire, we'd be in serious trouble. 13 But if you can make it available us to, for 14 the small businesses, to the Committee Chairmen, the 15 number of businesses, the plans they're choosing, 16 and the outreach that's being made to small 17 businesses, and trying to develop that plan. 18 Last question, and then I'm going to -- 19 because there's other Senators here that want to ask 20 some questions. 21 I wanted to go into the website, just for a 22 real -- two brief questions. 23 Has there been any attacks on the websites, 24 and is there any breach? 25 And, who is liable for that breach? 1 DONNA FRESCATORE: No, the website is 2 monitored constantly for any particular -- for any 3 possible intrusions. 4 There have been no breaches to the website, 5 and there's been no known attacks. 6 SENATOR GOLDEN: And who would be responsible 7 for a breach? 8 DONNA FRESCATORE: We would -- there's 9 certainly policies and procedures, as well as 10 federal requirements, about notification in the 11 event of a breach. 12 Those are governed by such regulations as 13 HIPAA. 14 But, again, we have not seen any breaches, 15 and there's no known attacks on the website. 16 SENATOR GOLDEN: Thank you very much. 17 DONNA FRESCATORE: It is monitored 18 constantly. 19 SENATOR GOLDEN: Thank you for your 20 testimony. 21 SENATOR SEWARD: Thank you, Senator Golden. 22 Senator Martins. 23 SENATOR MARTINS: Hi, how are you? 24 DONNA FRESCATORE: Hi, Senator. 25 SENATOR MARTINS: Good morning. 1 Thanks for your testimony here today. 2 My questions center around, really, two 3 topics: 4 One: The number of people who have applied, 5 the number of people who constitute the pool of 6 eligible individuals or families who would qualify 7 for coverage; 8 And, then, the costs that you spoke to in 9 your testimony. 10 How many individuals in New York State lost 11 coverage last year? 12 DONNA FRESCATORE: That's not -- that's not 13 data that we have. 14 I can walk you through the information that 15 we do have. 16 Prior to implementation -- prior to the 17 enactment of the Affordable Care Act, New York had 18 already standardized its individual markets; 19 meaning, specifically, our individual direct-pay 20 market and our Healthy NY market. 21 And we know that, while enrollment 22 fluctuated, from time to time, in those programs, 23 that, prior to the Affordable Care Act, the total 24 enrollment between the two was about 100,000. 25 So, that's the, approximate, 88,000 or so 1 that Senator Hannon referenced earlier; 2 And, an additional 12,000 or so in our 3 individual direct-pay markets. 4 Because the -- because of the way the tax 5 credits are structured under the federal law, and 6 because we've seen the individual rates in 2014 7 decrease, on average, 53 percent from their 2013 8 levels, those individuals, through the marketplace, 9 have affordable options to purchase coverage. 10 And, in fact, we see throughout the state, 11 many consumers who had coverage, perhaps through 12 Healthy NY, seeing pretty significant reductions in 13 their premiums, from the combination of those 14 two factors: the premium rates going down, and, 15 their ability to access tax credits. 16 SENATOR MARTINS: I understand, but my point 17 is broader even than that. 18 You know, when we had this national and state 19 discussion over providing affordable care to 20 everyone, there is a great deal of discussion over 21 the number of individuals and families that did not 22 have coverage, who would be able to, as a result of 23 these efforts, obtain coverage. 24 And, I want to have a sense from you, as to 25 where we are with regard to those efforts. 1 Whether those numbers continue static, or 2 whether we've actually been able to provide coverage 3 to individuals and families who previously did not 4 have coverage. 5 And, how many people today, had coverage, 6 that no longer have coverage as a result of the 7 changes that have been put in place? 8 Because we do have people who are now without 9 coverage, who did have coverage as recently as a few 10 months ago; correct? 11 DONNA FRESCATORE: What I can tell you is 12 that, through the marketplace, of the 230,000 people 13 that enrolled, about half of them were uninsured. 14 So, we are certainly reaching people who did 15 not have insurance, through enrollment in QHPs, as 16 well as our enrollment efforts in our state Medicaid 17 program, where a higher percent -- higher than -- 18 slightly higher than 50 percent of people were not 19 insured. 20 Because our small-business market in New York 21 was not standardized prior to the ACA, and some 22 15,000 or so different products were out there, 23 I don't have -- we don't have data that shows how 24 many of those policies were not compliant with the 25 Affordable Care Act. 1 SENATOR MARTINS: Do you have an estimate as 2 to how many individuals in New York were uninsured 3 prior to the rollout of the Affordable Care Act in 4 New York? 5 DONNA FRESCATORE: Based on census data that 6 was part of the modeling work that was done by the 7 Urban Institute on behalf of the state, there were 8 about 2.7 million uninsured New Yorkers. 9 Of those, the expected enrollment, I think 10 this number was mentioned earlier by one of the 11 Senators, we expect that 1.1 million people will 12 enroll through the marketplace by the end of 2016; 13 by December 31, 2016. 14 So that then gives you some numbers about the 15 total number of uninsured and what the expected 16 enrollment is three years out, which we consider 17 full implementation. 18 SENATOR MARTINS: So that "2.5 million" 19 figure is probably still about accurate now, isn't 20 it? 21 DONNA FRESCATORE: Yeah, I don't know that 22 there has been any significant change, based on, you 23 know, census data, to that number, so I think it's 24 fair as an estimate of the uninsured. 25 SENATOR MARTINS: You've used the statistic, 1 "53 percent of reduction in premium rates," as 2 compared to those in effect in 2013. You've used 3 that a couple of times so far. 4 And, I just need some clarity on that 5 because, what's the baseline? 6 What are we comparing, when you compare, or 7 you say, that there's a "53 percent reduction"? 8 Because I have heard from a significant 9 number of individuals from my district who have 10 complained about premium increases. 11 Now, naturally, I expect I'm going to hear 12 from people who are complaining about increases, and 13 I'm not necessarily going to hear from people who 14 have gotten decreases. 15 But, is that based on a comparison of 16 equivalent coverages, or -- or year to year? 17 Because, as Senator Larkin mentioned earlier, 18 there are coverages that are now provided that, in 19 the past, perhaps an enrollee would not need, and so 20 the baseline for coverage has increased; thereby, 21 the cost increasing. 22 That "53 percent" figure is based on, I'm 23 assuming, comparable coverage, year to year, even 24 though, last year, that person may have opted not to 25 have the coverages; correct? 1 DONNA FRESCATORE: It is based on comparable 2 coverage. 3 The 53 percent average reduction is the 4 comparison of the individual direct-pay premium 5 rates in effect in 2013, compared to the individual 6 premiums in effect for 2014, for comparable 7 benefits. 8 SENATOR MARTINS: So if we had individuals 9 who did not choose to have the extensive coverages 10 that are currently afforded under this initiative, 11 they would see their premiums increase, not 12 decrease? 13 DONNA FRESCATORE: The 53 percent is a 14 comparison of the standardized products that were 15 sold in New York to individuals, to what's available 16 today in the individual market. 17 So, it's apples to apples. 18 SENATOR MARTINS: No, I understand, but it 19 doesn't take into account the fact that there are 20 fewer options available to individuals, because the 21 baseline for coverage has actually increased; 22 thereby, forcing them to purchase coverages that 23 they would not have had to have covered or to have 24 used last year; therefore, their actual premiums, 25 money out of their pocket, has actually increased. 1 Have you seen instances of that? 2 DONNA FRESCATORE: My understanding is, that 3 for individuals who are purchasing prior to the -- 4 prior to 2014, on the individual market, those -- 5 the products they were buying in the standard 6 market -- standardized marketplace were very 7 comparable to the products that are available to 8 them today. 9 Because there are so many, over 10 15,000 products, pre-Affordable Care Act, that were 11 sold in the small-business market, it is more 12 difficult to do that kind of comparison, because 13 it's not really a -- it's not really an 14 apples-to-apples comparison because, just of number 15 of different products that were in the 16 small-business marketplace. 17 SENATOR MARTINS: You know, what are -- in 18 your view, what are the challenges you have, going 19 forward? 20 You know, we've heard a lot today about all 21 of the positives, as they are. 22 What are the challenges, and what are the 23 pitfalls, and what were the hurdles, that you didn't 24 foresee, and you didn't tell us about this morning? 25 SENATOR LARKIN: Good question. 1 DONNA FRESCATORE: I think that our -- our 2 challenges are what they've been, really, since we 3 began this process; and that is: 4 To continue our outreach and education 5 efforts to New Yorkers throughout the state; 6 To continue to improve the customer 7 experience, on the website, when people call our 8 customer service center, when they work with one of 9 our sisters. 10 And it's -- as I said earlier, it's an 11 ongoing process. You know, implementation on 12 October 1st, in many ways, was the start of our 13 marketplace, and, it's a continual improvement 14 process that we are fully committed to implementing. 15 SENATOR MARTINS: One last point: 16 I think -- earlier you said that, policies, 17 insurance cards, numbers, would be -- identification 18 numbers, would be issued after someone paid their 19 premium, right, and that most of these insurers had 20 not sent out notices for payment until January 10th. 21 Is there a backlog now? 22 I mean, is this a significant concern? 23 Because, if they didn't get their notices for 24 payment until the 10th, this was rolled out 25 January 1st, they have, I'm assuming, a certain 1 period of time to pay. 2 Are we dealing with a widespread lack of 3 information being provided to individuals with 4 regard to, access to health insurance, access to the 5 policies that they have, access to identification 6 numbers? 7 And is there something that can be done to 8 expedite that? 9 DONNA FRESCATORE: Just as a point of 10 clarification, all invoices were sent out by the 11 10th, based on information reported by the health 12 plans. 13 Many of the plans had been sending invoices 14 throughout the course of the last several weeks or 15 months, as they received enrollment information from 16 the marketplace. 17 So, I just wanted to be clear about that. 18 Is there safeguards to consumers? People 19 have ten days from when they receive their invoice 20 to make their payment, and make their coverage 21 retroactive. 22 Most of the health plans have ways to 23 confirm, for providers, that individuals are 24 enrolled in their plans. Some of those processes 25 are telephonic, some are electronic systems; and, 1 so, those usual processes are in place. 2 And, again, we will work, and the health 3 plans will work, with anyone who enrolls and pays 4 their premium by the due date. And we're going to 5 be flexible there, to ensure that they have coverage 6 during the month of January if that's what they 7 would want to have. 8 SENATOR MARTINS: Thank you. 9 SENATOR SEWARD: Senator Hassell-Thompson. 10 SENATOR HASSELL-THOMPSON: Yes, thank you. 11 Just one quick question. 12 There was -- there was some conversation a 13 little earlier about the role of the facilitator -- 14 SENATOR RIVERA: Navigators. 15 SENATOR HASSELL-THOMPSON: -- navigators. 16 I'm sorry. And I think that that was part of the 17 question. 18 Are they, in effect, facilitators, or -- or, 19 really, how does that role play out? 20 Let me give you an example of what I mean. 21 Many have us, as electeds, understanding 22 the -- the immigrant population in our districts in 23 the Bronx, for instance, most of us did outreach to 24 many of our organizations, particularly our clergy 25 and other not-for-profit groups, in an attempt to 1 explain this process to them. And we invited 2 navigators, and others, to explain the program and 3 how it worked. 4 But I -- but I didn't see any kind of 5 outreach efforts by the State, for instance, to 6 reach out, particularly to our Medicaid population. 7 And I'm wondering if some of that may account 8 for why the registration in some them is a little 9 slower; or, is that an automatic system? 10 In other words, you have a list of all the -- 11 all of the Medicaid-eligibles, and so that, 12 automatically, they're sent information. 13 But what do they do with that information? 14 How do you ensure that they understand the 15 choices that are available to them? 16 Who's doing, that, to enhance your ability to 17 reach some of the hard-to-reach in our communities? 18 DONNA FRESCATORE: So, thank you, Senator. 19 The role of the navigator is to actually act 20 on behalf of the individual, and help them submit 21 their application. 22 So, the navigators, the expectation, and what 23 they provide to individuals in the community, is 24 more than just presentations with basic information 25 about how to enroll or where to go to enroll. We 1 actually expect them to accept the application. 2 In fact, a number -- a good percentage of 3 applications are handled by navigators, as insurance 4 brokers are assisting individuals as well. 5 We also have had outreach in communities. 6 I think that we have been in many 7 communities, if not most, throughout New York State 8 with informational types of forums. 9 We're always happy to engage with you on 10 those kinds of activities, on a local level. 11 We've met with many community organizations. 12 We have met with faith-based leaders in 13 different communities throughout New York, as well 14 as consumer organizations. And we -- 15 SENATOR HASSELL-THOMPSON: But the question 16 is who initiated that? 17 I mean, is that an expectation that the 18 community initiates that? Does the navigator, you 19 know, initiate that? 20 And when you say that they do this as a 21 process with the individuals, how do they access the 22 individual? 23 The individual, obviously, is not going to 24 pick up the phone and call them, because they don't 25 know they exist. 1 So, you know, how does that work? 2 DONNA FRESCATORE: So it -- I think it's -- 3 you know, I think, certainly, it's our 4 responsibility in the marketplace to initiate the 5 community outreach, but we also are receptive to 6 others in the community who may want to organize 7 outreach. And we will -- we are happy to 8 participate in that when we can be helpful to that 9 effort. 10 The navigators do community presentations. 11 They are in libraries in communities, in 12 health centers throughout communities. 13 They're in a variety of different locations 14 where people in the community live and work and 15 conduct, really, their daily business and 16 activities. 17 So, a navigator would be present there. 18 They're available by appointment, to meet 19 with individuals and process their application for 20 them. Or, they can, you know, meet in a community 21 location as well, and assist consumers. 22 So that's really the very important role that 23 navigators play in our community. 24 And we welcome the opportunity to work in 25 communities, along with you as well, to help spread 1 the word. 2 SENATOR HASSELL-THOMPSON: Thank you. 3 Thank you, Chairmen. 4 SENATOR SEWARD: I know Senator Golden has a 5 follow-up. 6 SENATOR GOLDEN: One quick backup question. 7 I just had to go back to the D'Andrea 8 situation again. 9 And, really, as I sit here and I process 10 this: If you have to be able to get six, seven, 11 eight doctors, medical professionals, into a room, 12 and you have hospitals that only have one or two 13 plans, and, other hospitals, the networks that have 14 four or five, six plans, isn't there a situation 15 that we fear, that we see in other nations, where we 16 have a backup, where you can actually have to be 17 able to get each one of these doctors into that 18 operating room at a specific date, that are 19 in-network, and how many of those doctors are not 20 in-network within those hospitals? 21 So doesn't that really create a scheduling 22 issue for us and for the state of New York? 23 DONNA FRESCATORE: I think that it's -- you 24 know, you raise an important point, Senator Golden, 25 that, you know, it's -- and one of the reasons that 1 we -- you know, we believe that, really working in 2 collaboration with health-care providers and with 3 health plans, we need to build very strong, very 4 robust networks, so that consumers have the 5 protection and the assurance that, when they need a 6 medical service, that they're seeing a physician or 7 other health-care provider that's affiliated with 8 their plan. 9 We think that in -- you know, in the end, we 10 understand, again, and we are aware, that there's 11 interest in out-of-network benefits. 12 But we think that the really best answer for 13 most consumers, is to have a plan that has a very 14 robust health-plan network, where they have 15 assurances that the provider's in the network, and 16 they know what their out-of-pocket corresponds are 17 going to be before the service is rendered. 18 SENATOR GOLDEN: Well, it works only the -- 19 if you're not in an acute situation in one of the 20 larger hospitals that take care of the more serious 21 issues that are presented to families and to 22 individuals. 23 And what you're going down to are, hospitals 24 that -- doctors that are all hospital employees, 25 then you don't have that problem. 1 But in the larger sense of, New York City, 2 and around the state of New York, where you have 3 these expert doctors and hospital facilities, 4 getting these people into -- or all of these people 5 into an operating room in a timely fashion for 6 somebody that needs an operation next month, say, 7 I think is going to definitely present a scheduling 8 situation here, not only in this state, but across 9 the nation. 10 Any further comment on that? No? 11 DONNA FRESCATORE: No, I don't think so. 12 SENATOR GOLDEN: Thank you. 13 SENATOR SEWARD: Well, thank you very much, 14 Donna -- Ms. Frescatore. 15 DONNA FRESCATORE: Thank you. 16 SENATOR HANNON: Thank you. 17 Obviously, we're gonna have lots of 18 conversations. 19 SENATOR SEWARD: Our next panel are 20 consumers, purchasers of health-insurance coverage; 21 and that is: 22 Mary Morse, who's owner of 23 Kwik-Kut Manufacturing, a fine small manufacturing 24 facility in Mohawk, New York; 25 As well as Pamela Reese Finch, a public 1 relations consultant. 2 Who would like to go first? 3 MARY MORSE: Can you hear me? 4 SENATOR SEWARD: Yes. Just keep close to the 5 mic. 6 MARY MORSE: All right. 7 Good morning. 8 It's still morning. 9 Okay, I would like to thank today's -- 10 Senator Seward for inviting me here today. 11 I am a small-business person, probably 12 smaller than most. 13 I own a manufacturing company, as there are 14 still manufacturers left in New York State. 15 We have been in the village of Mohawk since 16 1955, and the company was actually started in the 17 1940s. 18 I have provided these little red booklets for 19 you, so you can learn a little bit about the 20 company, and some -- there's also mentioned in 21 there, a few of the other issues that New York State 22 businesses are facing, in addition to the 23 health-care issue. 24 I've been looking forward to 2014 about like 25 putting a stick in my eye. 1 There's a lot of changes coming down, 2 especially in taxation. 3 There's two benefits, in all the years of our 4 company, that we have received from the State of 5 New York: 6 One is the Empire Zone, which was for 7 manufacturers, which you may or may not know is 8 sunsetting this year. And, my company did receive 9 benefits from that, which we no longer will. 10 The other one that was, I feel, a little bit 11 of a Godsend for my employees was Healthy NY. 12 I have kind of a unique situation with 13 employees. 14 I have three full-time employees, and 15 five employees that are retired and part-time 16 people. 17 I had a couple of employees that were 18 actually on Family Health Plus. 19 Back in 2009, they got canceled from that 20 because their son had the nerve to turn 18. 21 So, because their family became smaller, 22 their income was higher, and they no longer had 23 Family Health Plus. 24 So Healthy NY, you know, was available. 25 I didn't have any other plan in my business, 1 so, I actually let the employees pick which plan 2 they wanted through the Healthy NY plan, and they 3 chose a plan that was a non-prescription plan. 4 But other than not having prescriptions, 5 I would compare it to any of the Gold plans that are 6 offered on the exchanges today. 7 They had excellent health-care coverage. The 8 coverage they picked was through Excellus. They 9 could use it anywhere up in our area. 10 And, I contributed half towards their 11 premium, and deducted the other half from their 12 paycheck. 13 At the time, in 2009, the premium for that 14 policy was $176. 15 The -- in 2013, the premium was $226, which 16 I think you will agree is one of the smallest 17 increases of anything in that amount of time. 18 I also had another employee who was retired, 19 worked for me part-time, and he chose the Healthy NY 20 plan, which he contributed -- he paid the full 21 premium. 22 When I had to tell these -- with the 23 Affordable Care Act coming along, and I had to tell 24 the employees that they were canceled. We received 25 a cancellation notice. 1 And, the next thing I got was, which is in 2 your folder, is the policy that was the replacement 3 policy for their Healthy NY policy. 4 This policy now was $100 more a month. It 5 was loaded with co-pays. It's loaded with 6 out-of-pocket deductibles. 7 And, not only that, one small paragraph below 8 all the rates was, "If you do not have" -- the 9 policy did not include pediatric dental. 10 So if they did not have a dental policy 11 somewhere else, this policy was null, void, and a 12 moot point. 13 Well, I don't, for the life me, know where 14 someone who is a single person, who is 60 years old, 15 and never been married, would have a pediatric 16 dental plan someplace else. 17 So, that meant that that policy went by the 18 wayside. 19 The next thing that I -- because I am under 20 the 50 employees and I am not required to offer 21 health insurance, after speaking with my accountant, 22 and, you know, considering what was best for my 23 employees, I had to take the route of not offering 24 health insurance anymore. 25 I had to just cut them loose and send them 1 out on their own to the exchanges; and, so, that is 2 what they did. 3 I have two employees who signed up for -- 4 who -- you know, the other part of my businesses, 5 these are people who make $10 an hour, and the 6 maximum number of hours they work is 32. 7 We're only open 32 hours. 8 So that's not a very large paycheck to be, 9 you know, trying to take home. 10 The only plan that they -- after they went 11 in, a couple of the employees received almost the 12 entire full subsidy that is available. That's -- 13 that's their income is. 14 And so, after they received, you know, their 15 subsidy notification, as was spoken about, they went 16 in and selected their plans. And the only plan that 17 they could afford is a Fidelis Medicaid-based plan. 18 I -- you know, I'm very, very fearful for 19 their situation, because I think that this plan 20 has -- it also has very high deductibles, a lot of 21 out-of-pocket expense. 22 There's a lot of doctors and hospitals that 23 are not accepting Fidelis down around us. 24 So, on a day-to-day basis, of people who are 25 relatively healthy, they will be perfectly fine, but 1 if they have a major medical issue, I am very, very 2 concerned about them. 3 The other gentleman who was retired, he has a 4 cancer situation, where he has to go yearly for a 5 colonoscopy, and usually ends up, for the last 6 five years in a row, has actually had surgery every 7 year. 8 The plan he had with Healthy NY, he loved it. 9 He never had to pay any money out-of-pocket. He 10 could go see his specialist. He could make timely 11 appointments. 12 Now he has -- you know, he's also out on his 13 own now. 14 He is not a destitute person, by any means. 15 He has a good pension from where he retired from. 16 So, he took -- but he's not a person, of 17 course, who likes to spend more money than he needs 18 to, so he selected a plan that was also around 19 300-and-some dollars a month, also loaded with a lot 20 of co-pays, also loaded with, you know, high 21 deductibles. 22 And he has, at this point in time, although 23 all three of these people were signed up on time, 24 I haven't -- didn't check with them today, but as of 25 Thursday, none of them had their insurance cards. 1 He's had to cancel -- he canceled his 2 colonoscopy, he's canceled his appointment with his 3 cancer doctor, because he felt that he couldn't 4 really go do that without an insurance card. 5 I did make a phone call to Little Falls 6 Hospital, the head of Little Falls Hospital, which 7 is in the Bassett network, which he would be going 8 to Bassett, and when I asked that gentleman, what is 9 their procedure for the people who may be coming in 10 without their medical cards, he told me that they 11 plug their social security number into a computer 12 and that will tell them if they're covered or not. 13 So he probably could have gone ahead and done 14 that, but, you know, he didn't think he could. 15 The other side issue of this, looking at it 16 from a business perspective, is, I have -- because 17 of this, there's no way that I could have kept a 18 health-care plan in my business and afforded to pay 19 for half of the employees' medical insurance, but 20 mostly because they could not have afforded to pay 21 half, their half, because, if I had had a group 22 plan, they would not get a subsidy. 23 They might end up with a tax credit, but a 24 tax credit means you're waiting to maybe get more 25 money back on your income tax, maybe in -- well, if 1 you file in January, maybe in April. Or if you file 2 in April, maybe three months after that. 3 These are people who need money day by day, 4 week by week, you know, to live on. 5 So, it was a very hard decision for me. 6 Now my business has lost a tax credit that 7 I got for contributing towards my employees' health 8 insurance. 9 I feel that I -- and I have taken what I did 10 contribute toward their health insurance and added 11 it into their paycheck, because I just felt -- which 12 I know a lot of small businesses would not, but 13 I felt that was kind of their money, and it was 14 already an expense. 15 So by adding that into their paycheck, now 16 I'm paying more workers' comp, I'm paying more 17 disability insurance, I'm losing a tax credit. 18 They're losing -- they're paying more taxes 19 because their -- before their payment was pre-tax in 20 their paycheck, and now it's not. You know, now 21 they've got more money in their paycheck. 22 So, it kind of remains to be seen what 23 happens next year with this, now that their pay is 24 up. 25 Their subsidy's gonna go down, so, where is 1 all that, you know, working out? 2 And, you know, my hope in coming here today, 3 is that, New York State, which I have to give a lot 4 of credit for in the health-insurance market, 5 because there was Healthy NY, and there is 6 Child Health Plus, and, you know, what's going to 7 happen, you know, with this down the road? 8 And my hope would be, that something could be 9 worked out for some kind of a subsidy for either -- 10 you know, if there was some kind of a subsidy for me 11 to go back into offering them health care, I would 12 tell them to drop their lousy plans and, you know, 13 get a better one, you know, right away. 14 But what's killing the price of the plans is, 15 these are three people who, they didn't -- none of 16 them took a prescription. They didn't want a 17 prescription plan. They don't need pediatric 18 dental. 19 You know, as one of the gentlemen said, 20 there's a lot of things in this health care that we 21 have to pay for that no one's ever going to use. 22 So, that's kind of my 25 cents. 23 I'm up, inflation. Used to be two. 24 [Laughter.] 25 SENATOR SEWARD: Thank you, Mary. 1 I know I had a couple of questions, but why 2 don't we have Ms. Finch make her statement, and then 3 we'll see if any of the Senators have questions. 4 PAMELA REESE FINCH: Thank you very much for 5 the opportunity to be here. 6 Can you hear me alright? 7 SENATOR HANNON: Move closer to the mic. 8 PAMELA REESE FINCH: I appreciate the chance 9 to share my opportunity in dealing with the federal 10 forum issue; and, in particular, New York's health 11 exchanges. 12 For more than a decade I've been a sole 13 proprietor. 14 I specialize in public relations and advocacy 15 services, and, I live in Upstate New York, with my 16 two children. 17 Four years ago, despite making some pretty 18 big changes that would ensure my family's coverage, 19 I lost my health insurance. 20 Since that time, I have looked into different 21 options; and, so, like a lot of people, I was really 22 excited to see what would become available through 23 the exchanges. 24 I think what's really important for this 25 discussion is the fact that the term "affordable" is 1 relative to your situation and your circumstances. 2 When I come here and speak today, I'm pretty 3 much in the same boat as your community's barber or, 4 you know, your local hairdresser: the average 5 middle-class-family income. 6 When you first look at the prices through the 7 exchange, some of the premium numbers can be 8 deceiving and look relatively low. 9 What people don't understand is that there is 10 a greater need now for cost-sharing. 11 So, while some of the plans may offer, for 12 example, some of the figures I pulled on the Bronze 13 level, had the lowest level at $233, which doesn't 14 look bad until you put it in perspective, that 15 you're paying $100 to see your specialist, that 16 you're paying $50 for your primary-care visit. 17 So, in essence, you may be paying less in 18 your premiums, but you're still paying the same 19 thing that you were before the federal health-care 20 reform. 21 I know that when I looked, in my situation, 22 because I am a relatively healthy individual, to 23 purchase health insurance, I would actually be -- 24 pay more than what I currently paid for my regular 25 out-of-pocket costs. 1 I'm not saying that I'm opposed to the idea 2 of high co-pays or deductibles. 3 I do feel that personal responsibility is 4 something that's necessary for us all to achieve 5 affordable coverage. 6 But I'm saying, in terms of dollars and 7 cents, when we look at this from a purely business 8 perspective, if you're asking me to make the 9 decision between my son's braces or paying my 10 self-employment taxes, the health-insurance coverage 11 may be at the shorter end of the list. 12 When you're looking at people like me, what 13 we're really looking for is ways to reduce the 14 overall health-insurance cost. 15 I heard a lot of discussion earlier today 16 about the out-of-network people wanting to be able 17 to see physicians who are not part of their network. 18 I know that I did look at the website, and in 19 order to apply for the plans that were available, 20 I would have to change my doctor; and, frankly, if 21 I could find a plan that fit into my budget, I'd be 22 happy to do that. 23 For me, it's more about getting access to the 24 basic coverage. 25 For people who have insurance, and I think 1 that it was mentioned earlier, there are some kinds 2 of safeguards in place, whether -- you know, that 3 will allow them to receive their medical care. 4 And I know this isn't what everybody wants to 5 hear, but I think, right now, our focus has to be on 6 giving everyone basic affordable coverage, versus, 7 making it cheaper for those who already have it. 8 One of the other things I would like to see, 9 as a health-care consumer, is a little bit more, 10 I guess, predictability, in terms of billing. 11 Because I self-pay for all of my employments, 12 I've had the rather eye-opening experience of really 13 seeing what my providers charge. 14 The problem with that is, I only get the 15 information after the fact. 16 Recently, I went to what was a 10-minute 17 visit to my primary-care physician, to take care of 18 a sinus infection, which ultimately cost $283, plus 19 $80 for the generic medicine. 20 Meanwhile, my gastroenterologist charged $110 21 for a 15-minute follow-up. 22 From a consumer's perspective, this type of 23 disparity makes it very hard to budget or get any 24 kind of a real grasp on your health-insurance cost. 25 And I know that, from my perspective, 1 I would like to see some type of transparency in 2 knowing beforehand how much I'm going to be charged 3 for that particular visit. 4 When I meet with my own clients, I know 5 I discuss the job, the expectations, and the costs 6 beforehand. 7 Likewise, when I take by car to have the 8 tires put on it, I know that my mechanic charges 9 $95 an hour for labor. 10 What I would like to see, as a consumer, 11 especially one who pays for my services 12 out-of-pocket, is some kind of upfront pricing. 13 As I said, that's my experience, but, it very 14 much mirrors what I've been told by many other of my 15 colleagues of sole proprietors in my community. 16 We appreciate the accessibility that's been 17 made from the health-insurance exchange, but right 18 now, what we'd like to see is things that still make 19 it a little bit more affordable. 20 SENATOR SEWARD: Thank you very much. 21 I wanted to go back to Mary Morse's 22 testimony. 23 And we really do appreciate both of you 24 coming here and sharing your real-life experiences 25 which you're going through at the moment. 1 I just wanted to clarify, in terms of what's 2 happened to your employees who have gone out on the 3 exchange to seek coverage on their own. 4 Now, they are paying over $300 a month. 5 Is that with the subsidies? 6 MARY MORSE: No. 7 The one that is paying over $300 a month is 8 not getting any subsidy. 9 SENATOR SEWARD: I see. 10 MARY MORSE: He receives a good pension. 11 He's -- actually, he's a Remington retiree. 12 And the other two are getting almost the 13 maximum subsidy. They're the ones on the 14 Fidelis plan, and they still pay -- they still pay 15 over $100 a month, even with the subsidy taken off. 16 I'm not sure what the total amount was with 17 the -- I believe it was still almost $400 a month, 18 you know -- well, no. It would have been 350, 19 because they're actually two -- two people on the 20 same policy, because they're a husband and wife. 21 SENATOR SEWARD: Did you personally, either 22 of you, deal -- go on the exchange and go through 23 that process? 24 MARY MORSE: I did not. 25 PAMELA REESE FINCH: I did. 1 SENATOR SEWARD: You did? 2 PAMELA REESE FINCH: Yes, I did. 3 SENATOR SEWARD: And what was your 4 experience? 5 PAMELA REESE FINCH: The website itself was 6 relatively easy to use. 7 It was quite a bit more time-consuming than 8 I had expected, but I was able to comprehend the 9 information. 10 Uhm, it's not as bad as what I've heard the 11 federal government's website would be. 12 I think our state did a good job with ours. 13 SENATOR SEWARD: Yeah. 14 Did -- have either of you, or through -- your 15 employees, did they work with a navigator or an 16 agent or a broker? 17 MARY MORSE: No, nope, all of my employees 18 actually went through the website, and said they -- 19 you know, they had a very good experience with it. 20 Actually, they even -- because we need 21 broadband better in this state -- 22 SENATOR SEWARD: That's another important 23 issue. 24 MARY MORSE: -- one of them was doing it from 25 home. And, probably, they -- I think they got 1 bounced off about three or four times because of 2 their Internet service, not because of the site. 3 And they said it was very, very easy to go -- once 4 you logged in, they said you had your log-in, and 5 they could go back in. Or if -- and the other 6 gentleman said, a couple of times, he had to go get 7 more information. 8 And they all had very, very good experiences 9 with the website, I will say that. 10 SENATOR SEWARD: As I understand both of your 11 statements, just as policymakers, to the best of our 12 capabilities and abilities under this federal law, 13 if we were able to develop a product or process that 14 would -- kind of like the old Healthy NY product, 15 have access to that, and qualified under the federal 16 legislation, that, you would see that as a very 17 attractive option? 18 MARY MORSE: Absolutely, uh-huh. 19 PAMELA REESE FINCH: Yes. 20 MARY MORSE: I think it's just -- you know, 21 it's just one more thing to help business out a 22 little bit. 23 I -- I -- because I know a lot of business 24 people, I've actually asked around what a lot of 25 them were doing about the health care. 1 One business person that has been in business 2 his entire life, and, you know, from his parents, on 3 down, he's in his early 50s, and told me the other 4 day that, for the first time in his life, he has no 5 health insurance. 6 He had a plan through one of the chamber of 7 commerces. That, that plan, you can't have that 8 plan anymore. 9 So, he said that it increased, you know, 10 four times what he was paying, and he's a single 11 person. 12 And that's -- that's the story that you hear 13 out there. 14 Other business people have gone to the 15 high-deductible plans. 16 And I know one employer has had a 17 high-deductible plan, and he actually pays so much 18 of his employees' out-of-pocket expense, until they 19 get into the -- get into anything else. And he says 20 it comes out cheaper for him than it did when he was 21 paying their premiums. 22 He just pays their bills. 23 SENATOR SEWARD: Thank you. 24 Any other questions? 25 SENATOR MARTINS: I just have one. 1 SENATOR SEWARD: Senator Martins. 2 SENATOR MARTINS: Ms Morse, thank you very 3 much for your testimony. 4 MARY MORSE: Sure. 5 SENATOR MARTINS: I just want to follow up on 6 a point you made. 7 You said something, and I'm going to 8 paraphrase, that you think they'll be okay, but if 9 they need insurance, they may be in trouble, or 10 something along those lines. 11 MARY MORSE: Well, I -- you know, I just 12 think that looking at the Fidelis plan, you know, 13 just to use that as an example, which is a 14 Medicaid-based plan, there's a lot of hospitals and 15 doctors that do not accept that plan, especially, 16 you know, I'm from, like, the Utica area, you know, 17 up around there. 18 They -- I made them check with their doctor, 19 and their doctor does accept the plan, so they were 20 okay that they could keep their doctor. 21 But, when I -- just looking at, you know, 22 $2,500 out-of-pocket, if you're already -- you know, 23 if they already are giving you all this subsidy, and 24 they know that you don't have a lot of money, where 25 are you getting $2,500 out of your pocket? 1 SENATOR MARTINS: Yeah, but I just wanted to 2 point out, and I think you would agree, that a 3 hope-and-pray is not an alternative. It's not an 4 appropriate health-insurance alternative for what 5 we're talking about here. 6 MARY MORSE: Yes. 7 SENATOR MARTINS: You were here for the 8 testimony we heard previously, weren't you? 9 MARY MORSE: Uh-huh, yes. 10 SENATOR MARTINS: And you were able to listen 11 to how great the system is, and how wonderful this 12 rollout has been. 13 MARY MORSE: Uh-huh. 14 SENATOR MARTINS: But if I've heard anything 15 from both of you, it's that your experiences have 16 been just the opposite, and it's raised far more 17 issues than it has answered. 18 So, I appreciate your testimony here this 19 morning. 20 Thank you. 21 MARY MORSE: Thank you very much. 22 PAMELA REESE FINCH: Thank you. 23 SENATOR HANNON: Thank you very much. 24 SENATOR HANNON: Thank you for being here. 25 Our next panel will be physicians: 1 Dr. Nick Fitterman, Dr. Andrew Kleinman, and 2 Dr. Patricia McLaughlin. 3 Dr. Kleinman, since you're the 4 president-elect of the state medical association, 5 I'll let you go first; 6 And, Dr. McLaughlin, you can go next; 7 And, Dr. Fitterman, since you're from that 8 small little health-care system. 9 DR. ANDREW KLEINMAN: Thank you very much, 10 Senator. 11 My name is Andrew Kleinman. I'm a practicing 12 plastic surgeon in Rye Brook, New York. And, I am 13 president-elect of the Medical Society of the State 14 of New York. 15 SENATOR HANNON: Could I just ask one 16 short-term, so we don't have a lot of waiting time 17 in the waiting room, could you not read, but maybe 18 sum up the core points that you want to address? 19 DR. ANDREW KLEINMAN: I am. Certainly. 20 Basically what I -- I really want -- 21 I appreciate this opportunity to speak, and I have 22 to say that I think the State has done a very good 23 job in what it's done so far, in terms of rolling 24 out the exchange. 25 Also, I have to say Donna Frescatore and her 1 staff have been very open to dialogue with us right 2 from the beginning. 3 So, I really think they have done a very good 4 job, as far as they can go. 5 We remain committed to work with them in 6 order to make this work. 7 Some of our members, politically, were in 8 favor of this, some weren't, but the bottom line is, 9 it is here, and we want to make this work. 10 The problem that we have, is that having 11 access to insurance coverage is not exactly the same 12 as having access to health care, and that's where 13 our problem -- our problems really lie. 14 Basically what has happened, is that, with 15 the rollout of this, there have been networks of 16 physicians listed on the websites of the various 17 insurance companies. 18 Now, first of all, it's very hard to find 19 those lists because you can't access it directly 20 from the website of the New York State of Health. 21 You have to go into the individual carriers. 22 Then when we looked at the lists, we saw a 23 number of inaccuracies. 24 And we actually did a survey of our 25 physicians, and, basically, of the people who 1 answered the survey, one-third said that they 2 weren't going to participate in the plan. 3 40 percent said they didn't know if they were on the 4 plans or not. 5 So we have actually recommended to 6 physicians, go onto the websites and see if you're 7 on the plans. And some of them have a great deal of 8 difficulty even finding out if they're on the plans. 9 We actually have started calling around to a 10 number of the physicians who have been on the plans, 11 and a number of them have said they are definitely 12 not on the plans. 13 Some are in the plans because they have an 14 "all products" clause in one of their you contracts, 15 or they're in a rental network. But the ones that 16 are in rental networks that can't opt out, even 17 though they're listed on the plan, have said that 18 they are going to be opting out. 19 So, therefore, although on paper it looks 20 like the networks are adequate, in reality, the 21 networks indeed might not be adequate. 22 Also looking on the website, we actually have 23 found a few physicians who aren't even in 24 New York State, and haven't been in New York State 25 for the past year or so. 1 We did a survey of neurosurgeons in 2 Suffolk County. 3 One lives in New Jersey, and has for a while; 4 one lives in Albany, and has for a while; so, 5 therefore, they've been included in multiple 6 networks, and they're not. 7 The -- one of the problems with having 8 physicians participate, is that, although we can't 9 ask directly how much do the networks pay, the 10 physicians supposedly can. 11 The physicians, in a lot of cases, are having 12 a very hard time finding out what the reimbursement 13 is. Although there are laws in New York, basically, 14 it's been rather difficult to find out. 15 When the physicians do find out, very often, 16 the reimbursement is significantly lower than it is 17 on any other network within an insurer's -- an 18 insurer's networks. 19 And, very often, it's significantly lower 20 than even the Medicare rate, which, as most of us 21 know, is already inadequate; so, therefore, it makes 22 it very hard for a physician to remain viable and 23 continue to participate. 24 In addition to that, there is the 25 "90-day grace period" rule that's going to come into 1 effect; so, therefore, physicians will be taking 2 care of a lot of patients who actually look like 3 they have insurance, but, in fact, haven't paid 4 their premium. 5 And that's a federal problem, and I know we 6 can't do anything specific about that. 7 We are working with the AMA and Congress in 8 order to try to modify that. 9 We have some suggestions on how at least to 10 notify physicians when a patient is in that grace 11 period. And, if the patient does pay a premium 12 60 days after the due date, that, at that point, 13 rather than starting over the 30 days again, if we 14 could have reimbursement done a little sooner. 15 I think what we're asking for is, basically, 16 to, essentially, make it so the networks are 17 adequate, the networks are accurate. 18 And I think one of the things that we would 19 like to see, is that, in the exchange, a physician 20 actually has to have a contract with the insurance 21 company. 22 That way, when a patient calls a physician 23 and says, "I'm in X network," the physician will say 24 they take it. 25 I think one of the problems right now, having 1 a lot of physicians on the networks who really 2 aren't going to be participating in those plans, is 3 that, if you as a patient go onto the website and 4 say, "Oh, my physician's there; so, therefore, I'm 5 going to sign up for this plan," and then it turns 6 out that's inaccurate, or, as soon as the patient -- 7 as soon as the physician finds out, the physician 8 signs -- you know, basically, opts out of that 9 contract, a patient has, essentially, picked a plan, 10 that they can't see their own physicians. 11 The other thing that I think we do want to 12 ask for, is some out-of-network coverage. 13 And, Senator Hannon, we do support your 14 recent bill -- the number is in here somewhere -- 15 requiring companies to offer out-of-network 16 coverage. 17 And I think it's important to offer 18 out-of-network coverage in the exchange as well, 19 especially with the very limited networks that these 20 companies are going to have for the exchange. 21 I think it's very important for a patient to 22 have the ability to go out-of-network. 23 And we think that one of the reasons that 24 almost all of the companies -- in fact, downstate, 25 I think Oxford is the only one that offers 1 out-of-network at all, and they're only doing it on 2 the small-business exchange. 3 Nobody is giving it on the individual 4 exchange. 5 I think part of it is to try to coerce 6 physicians to have to participate in the exchange if 7 they want to see any of these patients. 8 So, again, I do want to say that, I think 9 they've done a good job signing up patients. 10 I think there will be a number of patients 11 who continue to sign up. 12 And our concern, is that the patients should 13 be able to have an adequate network across all 14 specialties, and, should be able to know who is in 15 their network. 16 Thank you. 17 SENATOR HANNON: Great summary. 18 Dr. McLaughlin. 19 DR. PATRICIA MCLAUGHLIN: Good afternoon. 20 Thank you for inviting me here today. 21 I'd like to speak, not only as a physician, 22 but as a small-business person, because, 23 inadvertently, I have been hit twice in this 24 situation, and I think my personal story will have 25 great impact on the problems that are out there. 1 As a small business, in 2013, my office is in 2 New York City on the Upper East Side, and I had two 3 employees who were qualified for health insurance, 4 and, I paid for their premiums. 5 We had elected, Empire Blue Cross/Blue Shield 6 called "Total Blue." It was a high-deductible plan. 7 And I resorted to that back in 2008 when the 8 premium had jumped up to an astronomical number if 9 I didn't take a high-deductible plan. 10 So once it reached $859 a month per 11 individual, I sought some relief. 12 Fortunately, I had a brilliant broker, and he 13 gave me the advice to consider one of the 14 high-deductible plans. 15 That same year, the premium for the same 16 health plan, the same coverage, the same network, 17 decreased from $859 to $300 an individual. 18 I was thrilled. 19 Yes, that meant my employees and me all had a 20 $2,000 deductible. 21 There was the option for an HSA account. 22 I did as much investigation as I could. 23 I found a wonderful bank who was very 24 knowledgeable in this, had a long track record, and 25 I set up the health-savings account. 1 I contributed, not in a health-savings 2 account, but I did contribute towards the deductible 3 for my employees. 4 They did not want to open up a health-savings 5 account, fearing that the money might be locked in 6 there. 7 As the years went along, this just renewed 8 every January 1st, and I was thrilled. 9 I never expected to get a letter at the end 10 of September, telling me that this wonderful plan 11 that covered everything, everything that we needed, 12 was suddenly, because of the ACA, in the letter, not 13 qualified, and was not going to be renewed on 14 January 1st. 15 Literally, the rug was pulled out from under 16 me. 17 Now, at the end of a calendar year, running a 18 medical practice, and all the other issues that are 19 involved in end-of-the-year accounting work, I was 20 not pleased to suddenly have to start looking at 21 spreadsheets of other available plans and 22 contemplating the New York State exchange. 23 I didn't want us to go in as individuals, so 24 I wanted to keep this as a small group. 25 When I looked at what was available, I wasn't 1 pleased either. 2 When the insurance company sent me another 3 letter in a month after the first one, rolling out 4 what was the new concept, the new plan, I was 5 definitely not pleased. 6 And the reason is, my first plan, which we 7 were paying $483 a month, last year, in the new plan 8 would go down to $470. 9 That's about a 2.5 percent decrease. 10 The deductible, however, went up 20 percent, 11 from $2,000 an individual, to $2,500. 12 The coinsurance stayed the same. 13 What really disturbed me, was this -- now, 14 was an EPO plan, and that alphabet soup meant 15 "in-network only." 16 What further upset me, is that this EPO plan 17 in this national insurance company, suddenly, was 18 going to require referrals to see a specialist. 19 In the history of this company, the EPO 20 network did not require referrals. 21 So, suddenly, this new plan was targeted to 22 yet another hurdle that one had to jump. 23 It also mentioned in that letter something 24 that raised grave concern, that I must say I had a 25 bit of an advantage over other, probably, claim 1 administrators in non-medical businesses. 2 They were very careful to mention that, as 3 the administrator, I needed to check to see what 4 former doctors I had gone to in, literally, the same 5 network -- EPO and PPO, formally, have the same 6 network of doctors -- that I needed to check, and 7 I needed to tell my employees to check, to make sure 8 that the doctors we had seen were still in-network. 9 They also went on to state that whatever 10 drugs we were using, the medication network was also 11 changing. 12 That I couldn't find information to, but the 13 network I did. 14 So I went onto the website of the insurance 15 company and looked at the network, starting with 16 myself. 17 After all, I was a participating provider in 18 the EPO and PPO network. 19 I wasn't there. 20 I looked at my PCP; he wasn't there. 21 I asked my secretary what other specialists 22 she went to. There were four; they weren't there. 23 I asked the other person who worked in my 24 office for her doctors, and they weren't there. 25 Now, I must say that most of us were using 1 doctors within the same hospital system, but because 2 of this change, the premium was not the issue. 3 The network and the access was the issue. 4 And every single one of us, including my 5 husband who's my dependent, were losing our doctors. 6 100 percent of our doctors. 7 I don't think that anything should be 8 designed to cause that destruction, besides what it 9 did to me in chaos in my business. 10 So I started to look at other plans through a 11 broker. 12 I must say, that if I did nothing, by 13 default, the insurance company said I would roll 14 into this plan, which should indicate that I would 15 get the new insurance card, because they also 16 mentioned I would have a new insurance ID. 17 A month after that, I finally got the letter 18 that gave a clue as to why I wasn't in that network. 19 As per the terms of my contract, they did not 20 feel they needed to extended to me participation in 21 the Affordable Care network or the small-business 22 network that was using the term "pathway." 23 So they gave the network an actual term, 24 "pathway." 25 When I went to the website to look at how 1 many other ophthalmologists, a group that I'm 2 familiar with, being that's my specialty, there were 3 a lot of names in the ZIP code of my office. 4 I must say, if you looked at that list, there 5 were a few doctors who were either retired or who 6 had moved to another state within the past 7 six months; so, it was not refined. 8 I think the greater thing that was 9 disturbing, it wasn't in alphabetical order, which 10 made it next to impossible to look at, but, 11 I printed it out, and I must have seen at least 12 40 to 50 names that were duplicated. 13 So if they were counting the raw names, it 14 just meant they were in a different office; not that 15 you had more participating providers. 16 Now, I think it's rather ironic, or a little 17 short-sighted, to use a term in my own field, that 18 if you're going to insure more individuals through 19 the magnitude of the Affordable Care Act and the 20 New York State marketplace exchange, why would you, 21 as an insurance company, be looking to cut back on 22 the participating providers? 23 I wasn't even asked if I wanted to be in it 24 or not. I was just told, by my contract, I wouldn't 25 be. 1 Now, on the flip side, there was another 2 insurance company, that I had no knowledge, had put 3 me on the exchange, and I found out about that in 4 the third to fourth week of October, after the 5 website became live, by a patient who had 6 Healthy NY, who found out that he had lost his 7 insurance and needed to search for something. 8 And he said, "Oh, great, I see you're on the 9 Oxford United." 10 I said, "Really? They never told me." 11 And I said, "That's a little peculiar, 12 because I don't have a contract with Oxford to start 13 with." 14 So after doing a little bit of checking, it 15 turned out that that was an error. 16 For some reason, that company decided to put 17 the entire Oxford Liberty participating physician 18 group into the Affordable Care Act and the 19 exchanges, probably because, Oxford married United, 20 my name carried over from my United contract, but it 21 was an error. It took about another two to three 22 weeks before my name was removed, along with dozens 23 of other physicians who were similarly misplaced. 24 Now, in that time, individuals in 25 New York State were deceived. 1 They may have signed up on the New York 2 marketplace, thinking they were seeing Dr. A, B, and 3 C, who were not there, and should not have been 4 there, and, three weeks later, were taken off. 5 So, yes, we do need a lot of transparency, 6 because I think that there are mistakes in the 7 provider networks that are unclear. 8 I can tell you from my own personal 9 experience, I do not relish, and would not tolerate, 10 this limited network. 11 I have sought out insurance through another 12 carrier. I'm in a pending state. 13 They have my check; they haven't cashed it. 14 I'm in flux. 15 My secretary slipped and fell on the very day 16 that this meeting was canceled last week. She 17 injured her hand. 18 I didn't know what to tell her to do because, 19 this plan wasn't official, my new plan wasn't 20 official. We were sort of in limbo. 21 And I even said in my testimony, that I think 22 it was rather negligent on the part of an insurance 23 company, knowing they gave me notice about my plan 24 three months ago, that it was terminated, and 25 I received my insurance card, one of four, on 1 Saturday. 2 No one else has received theirs. 3 My husband should have been in that envelope 4 also, since he was my dependent. 5 I'm glad it came, though. 6 I have given 20 copies of this to the 7 staffers before this meeting, because I just brought 8 it up with me today. 9 Another thing that you must look at, and 10 I beg you to look at from a physician's standpoint, 11 the chaos that is going on right now with patients 12 coming to us, believing that we're in networks that 13 we don't know if we are, asking for care that we 14 don't know if we can truthfully tell them will be 15 covered as part of a network agreement. Or, we 16 can't even be transparent to say what the fee might 17 cost them, other than give them a fair estimate of 18 what that day's results would be. 19 We won't know, until we've filed this claim a 20 good four weeks from today, what the insurance 21 company's take on this is going to be. 22 Will it be handled as an in-network 23 participating group, or will it be rejected because 24 we're suddenly not in the panel? 25 This new insurance ID card couldn't be more 1 deceptive to a front-desk knowledgeable person in a 2 doctor's office. 3 It says that I have a PPO plan. 4 It does not mention the word "EPO." 5 I have an EPO. 6 It does not mention that I need a referral. 7 It does not even give credit to the name of 8 another person, Patricia Ann Foxman, with a phone 9 number. It doesn't even give her the credit of a 10 title of M.D. 11 I'm assuming she might have been my assigned 12 PCP. 13 On Saturday, after this came in, I decided to 14 call the phone number. 15 Lo and behold, the phone number is incorrect. 16 It tells me it was canceled. It gives me a 17 new phone number. 18 I call that phone number, I get a completely 19 different physician's office. 20 Now, I don't know, if I stay in this plan, am 21 I supposed to have this particular person? 22 Did they just put down the wrong phone 23 number? 24 Am I just automatically defaulted to the 25 other PCP? 1 And I'm somebody who understands this. 2 Please, for the majority of our citizens, the 3 people that we, as physicians, who work so hard to 4 help day in and day out, this is complete chaos. 5 This is not fair to anyone, mostly the 6 patients. 7 This is detrimental to the small business of 8 a physician's office. 9 I am a solo practitioner. I have a fiduciary 10 responsibility to pay my creditors. 11 If I have people calling up to schedule, in a 12 plan just as mine, telling my front-desk person they 13 have an EPO plan, how am I, as the physician, going 14 to know if I am still the participating physician in 15 the old PPO plans that are serving the larger 16 corporations, the federal government, Blue Cross, 17 the union plans, or am I in this new pathway? 18 If the patient doesn't even have the card, if 19 the patient doesn't even understand what "pathway" 20 is, they wouldn't be able to tell my secretary at 21 the time of booking the appointment what plan it is. 22 How can I be transparent when there's such 23 misinformation? 24 We need so much help. 25 I know that there's a limited time to talk 1 about this here, but all I would say to you is, I am 2 so willing to work with you. 3 Please reach out to me. I have a very good 4 handle on this. I would love to tell you more of 5 the pitfalls. 6 But the one thing that I completely resent, 7 and don't understand, is the complete elimination of 8 the out-of-network. 9 That is such an important and critical 10 factor, especially now that I am giving you perfect 11 evidence that these networks are not what they seem. 12 They are very narrow. 13 And I have had other physicians call me, 14 because they know of my ability to understand all 15 this, and they say, "I have a full practice. I'm 16 finding out I'm listed as a participating physician. 17 I've had five new phone calls today from patients on 18 the exchange, asking for an appointment as soon as 19 possible." 20 He said, "I can't fit them in. What am 21 I supposed to do?" 22 I said, "Either work later, or give them the 23 next available appointment. And, if necessary, send 24 them to the emergency room. I don't know what else 25 you can do." 1 There is a critical shortage happening here. 2 And if it's not that an insurance company 3 signed us off, it's, also, that they are paying us a 4 fraction of the Medicare-allowed fee, where we 5 cannot stay in business. 6 Thank you so much for your time, and I'm so 7 willing to answer questions for you. 8 SENATOR HANNON: Well, thank you very much. 9 It actually seems that the majority of the 10 complications that are befuddling your practice are 11 insurance companies, and not the 12 Affordable Care Act. 13 DR. PATRICIA MCLAUGHLIN: Absolutely. 14 SENATOR HANNON: Okay. 15 Now, I'm not going get into it, because 16 I think you've been very clear as to the problems, 17 but I will say one thing: 18 As a sponsor of at least two bills on 19 out-of-network, that it's much more difficult than 20 it would seem, and especially because you have 21 simply the logical objection, that if you start 22 regulating and mandating out-of-network, what 23 incentive will be left for physicians to join a 24 network? 25 Now, maybe it would be -- the incentive would 1 be if they just ran them rationally, instead of the 2 maze that you've had to go through; but, still, that 3 is the logistical legislative problem that we face. 4 DR. PATRICIA MCLAUGHLIN: Yes, but -- 5 SENATOR HANNON: I thank you very much, and 6 we still have to go to your co-panelist. 7 Doctor. 8 DR. NICK FITTERMAN: Thank you. 9 I'm Nick Fitterman. I'm a practicing 10 internist. I've been practicing for 22 years, 11 beginning of my career in private practice, and, 12 most recently, employed by a large health-care 13 system in our state. 14 I am here representing the New York State 15 American College of Physicians, the largest medical 16 specialty group in the state, with over 17 13,000 members. 18 I want to thank Senators Hannon and Seward 19 for sponsoring these hearings. 20 Again, as previously said, thanks to staff, 21 Donna Frescatore, and Sherry Tomaski, as they've 22 kept their bi-directional lines of communication 23 open. 24 And, actually, despite all the horror stories 25 we're hearing, thank all of the administration staff 1 for these efforts. 2 There's no doubt that this has helped to 3 improve the health of residents of New York State, 4 and in a Herculean task like this, there will be 5 road bumps; thus, the hearings today. 6 I am not reading from prepared testimony that 7 we've handed out to you. 8 I'm going summarize some notes that I took in 9 canvassing my colleagues; most importantly, in 10 canvassing the office managers, the practice 11 managers at many offices, as they had a lot of 12 information on the impact of this; and on a few 13 patient stories. 14 I'll be brief, because you've heard most of 15 this already. 16 So the challenges encountered by patients and 17 physicians fall into basically four broad domains 18 that overlap, and you've have heard them: 19 There's the problems with not having 20 insurance cards and IDs; 21 Problems with access; 22 A problem with continuity; 23 The problem with communication. 24 Not having cards or ID numbers when they show 25 up for office visits has been frustrating for 1 patients, has been a burden to the front-office 2 staff in these offices. 3 The offices do not have a method to go on and 4 check enrollment eligibility. 5 If the patients don't have their cards, and 6 sometimes even if they do, as we heard, they may not 7 know what the co-pay is, what deductibles are, what 8 the fee schedules are, and it leaves both patients 9 and the providers concerned about potential 10 financial exposure. 11 More importantly, it limits the capacity of 12 the providers of the docs to help facilitate care. 13 I hear story after story, where the doctor is 14 saying, "Fine, come on in, let me see the patient," 15 but, then, to facilitate the next step, whether it's 16 an ancillary service or referral to a subspecialist, 17 is next to impossible. 18 As far as access, the network is not 19 adequate. 20 We're hearing stories of patients getting 21 coverage, but not being able to see physicians, 22 either because there's an inaccuracy in the listing 23 in the provider network, or there are not -- or the 24 physicians in their region that are in the exchange 25 are full. 1 And, we're hearing some stories in 2 communities, where physicians are not able to meet 3 the demands of patients that now are insured, that 4 want to be seen and accepted into the practice; yet, 5 in the same community, there are physicians ready, 6 willing, and able to see these patients, but cannot 7 gain access to the provider network. 8 As far as continuity, again, as we've heard, 9 stories of patients having to -- being assigned a 10 PCP different from the PCP they've had for many 11 years, despite that PCP being in the exchange. 12 In communication, the common theme that I've 13 heard, that we've heard, in canvassing providers, is 14 lack of communication of the carriers to the 15 provider, letting them know if they're in the 16 exchange; if they're not in the exchange. 17 For those that have gone on and accessed the 18 site to see if they're in the exchange products, 19 they're having difficulties dealing with the 20 carriers in getting access into their provider 21 network. 22 Two quick real stories that I came across in 23 doing homework for today's hearings, that I think 24 will summarize this. 25 First: Middle-aged man, small-business 1 owner, signs up for a product on the exchange. 2 Presents to his primary-care provider, who he's had 3 for over a decade, with abdominal pain in the first 4 week of January. 5 He didn't have his card. He didn't have an 6 ID number yet. 7 The staff -- the front-office staff could not 8 figure out if he was enrolled, and, truly, in what 9 plan, what his co-pays are, or anything like that, 10 but the doc said, as he should, Just come on in, let 11 me take care of him. 12 He's got belly pain, they suspect 13 diverticulitis. 14 They had to shop around to four providers to 15 find someone who would do a CAT scan, because they 16 couldn't find out where he could get a CAT scan. 17 Finally, he wound up in the emergency 18 department of our local community hospital to get 19 that CAT scan. 20 The man was tolerating oral fluids and meds. 21 This was an ambulatory condition. No need to 22 get to the ED. 23 Second case, of a woman in her early 60s, who 24 had a kidney transplant about three years earlier, 25 who had a primary-care provider who had cared for 1 her for over three decades, who sent her to a 2 tertiary care in the city for her kidney. 3 They had been -- the transplant team there 4 had been following her for three years. 5 Transplant teams follow these patients very 6 closely for the remainder of their life, or at least 7 the life of the transplant. 8 And, now, the provider -- her primary-care 9 provider was in one exchange product. The 10 transplant center is in the another. 11 No overlap. 12 So she's forced to choose, who she gonna go 13 with? 14 I must say that these issues are not all 15 universal, and I did hear some good stories, so, as 16 we moved forward, including physicians having 17 success in gaining access to plans. 18 But in conclusion: 19 We urge you to continue to monitor; 20 Stress the need for an adequate and accurate 21 network of providers; 22 Continue to stress the need for a provider 23 helpline for each approved plan; 24 Ask for materials to educate physicians and 25 offices, and the New York ACP stands ready to help 1 distribute those and spread the message; 2 For New York State to help lead the way in 3 the 90-day grace period, that needs revision; 4 And, finally, thank you for allowing me to 5 speak. 6 SENATOR HANNON: There's little to add. 7 You've been very comprehensive, and very 8 illustrative, as to some of the problems that are 9 out there, and, really, where the oversight from the 10 Department of Financial Services is for the plan. 11 There's so much that we've heard before on 12 what the exchange is doing, but none of what the 13 exchange did is negated any of the responsibilities 14 of the Department of Financial Services, and, 15 there's a lot to be done. 16 The lack of information is incredible, and 17 it's going to result in bad patient care. 18 SENATOR SEWARD: I have one quick question 19 for you. 20 What is your experience in terms of the 21 reimbursement levels for participation in a plan in 22 the exchange, versus outside the exchange? 23 DR. ANDREW KLEINMAN: Well, for obvious legal 24 reasons, we can't actually do a real survey, 25 unfortunately, to find out how everybody is making; 1 however, we have had a number of physicians call to 2 complain. 3 And, basically, we have not heard from a 4 single physician, even when we asked, and we sent 5 out surveys, just to see, "How happy are you with 6 the reimbursement?" 7 Virtually every plan downstate -- upstate, 8 the situation is a little bit different. 9 But, downstate, almost every plan in the 10 exchange is paying at a lower rate, significantly 11 lower, than other plans in the same -- from the same 12 company. 13 And as I said, we have heard as low as 14 45 percent of Medicare, in some cases. 15 And, as those of you who have been doing this 16 for a while know, the Medicare rate already is so 17 inadequate, in terms of compatibility with staying 18 in practice, that 45 percent of Medicare, basically, 19 for most specialties, is lower than the cost of 20 doing business, so you're actually losing money 21 seeing those patients. 22 And I just want to answer what Dr. Hannon 23 kind of hypothetically --Senator Hannon, excuse me, 24 hypothetically asked about: What incentive would 25 there to be in-network? 1 And I think that comes down to a lot of the 2 crux of it. 3 If the in-network reimbursement was adequate, 4 most people would want to be in-network. 5 And what has happened is, as networks pay 6 less and less out-of-network, they can lower the 7 reimbursement in-network. 8 So, essentially, we think it's somewhat 9 coercive to try to keep people in-network. 10 So, basically, in terms of negotiating, the 11 one thing you have when you're negotiating with an 12 insurance company, is you can walk away. 13 If you can't see any patients at all if you 14 walk away, then you can't negotiate at all. 15 DR. PATRICIA MCLAUGHLIN: I'd like to address 16 one other issue. 17 I agree with the reimbursement. 18 It personally happened to me, so I was 19 actually relieved that I was mistakenly put on the 20 exchange in this one company, because I would have 21 been put out of business with the reimbursement that 22 they were going to give me. 23 But, if we look at the Australian system, as 24 far as what you said about out-of-network, there 25 is -- today, the insurance companies do not pay a 1 reasonable and customary fee. 2 They are using the Medicare Fee Schedule, and 3 paying a percentage of it for whatever little plans 4 are left that are paying out-of-network. 5 They are paying 110 percent of Medicare, to 6 140 percent. 7 So if a patient chooses, who's lucky enough 8 to have one of those out-of-network plans, chooses 9 to go to an out-of-network doctor, the patient knows 10 that they are not going to get anywhere near the 11 asking fee of that physician. 12 This actually is a good thing, in a sense, 13 because it will foster a sense of competition 14 between physicians. 15 So, if you are not in-network, and you are 16 charging more than your colleague down the block, 17 and most of the patients who are using 18 out-of-network choose to go to that person, you will 19 lose your practice, and you will lower your fees. 20 Competition fosters a lower health-care cost. 21 Please keep that in mind. 22 Covering everything from A to Z only 23 increases health-care costs. 24 There are plenty of studies that state this. 25 The cost of drugs have become astronomical 1 ever since managed care has sought to cover the cost 2 of pharmaceuticals. 3 You need to relook at a lot of this, but 4 I will tell you that I am advocating for 5 out-of-network benefits. 6 It is essential. 7 It will not hurt the insurance companies, 8 especially since they have chosen to limit the 9 amount their exposure to a high bill. 10 It will then be between a negotiation of the 11 patient to the doctor, and that is a good thing. 12 Thank you. 13 SENATOR HANNON: Thank you very much. 14 SENATOR SEWARD: Thank you very much. 15 SENATOR HANNON: [Inaudible.] 16 SENATOR SEWARD: Before we call up the next 17 panel, I'd just like to acknowledge that we have, 18 Senator Felder has joined us. 19 Thank you, Senator. 20 Our next panel are brokers and agents: 21 Dan Colacino is vice president of Rose and 22 Kiernan, Inc.; 23 Erin Nevins, who's president of 24 Nevins Insurance Agency; 25 And, Jack Smith, who's executive VP of 1 William A. Smith and Son Insurance Agency. 2 DAN COLACINO: Good afternoon, Senator. 3 Senator, thank you again for inviting us, 4 appreciate that. 5 SENATOR HANNON: You've got to all pull your 6 mics closer. 7 DAN COLACINO: Real close. Okay. 8 SENATOR HANNON: Especially because, the rest 9 of them in here, and the sound up here, it's 10 horrible. 11 DAN COLACINO: Oh, okay. All right. 12 I'll yell as loud as I can, then. 13 I'd thank Dr. McLaughlin for giving the 14 brokers a nice plug in her last testimony. We 15 appreciate that. 16 My name's Dan Colacino. I work for Rose and 17 Kiernan. 18 I've been there -- I've been working in the 19 insurance industry now for a little over 40 years, 20 so, I've seen everything, from ERISA being 21 implemented, to the Affordable Care Act. 22 So all the upheavals in the industry, I've 23 seen most of those. 24 I just want to touch on a few things that 25 haven't been really discussed much today. 1 We talked about the improvement in rates, and 2 I think the improvement in rates that we've seen has 3 been in the individual market. 4 As Donna Frescatore had mentioned, the 5 mandated programs in the individual market were 6 horribly expensive. 7 Individual rates in the individual market 8 were the same as family rates. 9 So, now, we've seen a significant decrease in 10 those costs. 11 So for people who are uninsured, unemployed, 12 or who work for an employer who simply doesn't 13 provide insurance, they now have affordable 14 insurance which they didn't even have before. 15 We'd like to compliment Donna and her staff. 16 They've been very good in reaching out to us, and 17 working with us, as our trade association, helping 18 us to understand and get through some of the 19 roadblocks that existed in the initial part of the 20 rollout. 21 Yes, there have been some bumps in there, but 22 I think, right now, in general, based on what 23 they've had to deal with, the changing regulations, 24 and so forth, I think, all in all, things have run 25 out pretty well. 1 And I can say that as a sole proprietor 2 myself. 3 I work for Rose and Kiernan, but I work 4 part-time these days, so, I'm a sole proprietor, so 5 I don't qualify for benefits. So I had to go 6 through the exchange to buy my own insurance, which 7 I did. 8 The experience was fine. 9 I went through the marketplace in, probably, 10 November of this year, and things went fairly well. 11 I ended up buying off-exchange, which I think 12 is something that we've missed. 13 The off-exchange market, where the carriers 14 offer the exchange-type programs, not through the 15 exchange, but directly as another resource for 16 people to go to, whether they're individuals or 17 small employers. 18 I ended up buying off-exchange because the 19 requirements off-exchange for some of those products 20 were a little more flexible. 21 Although they all had to meet the same 22 metal-level tiers, of the Bronze, Platinum, Gold, 23 and Silver, and so forth, they had a little more 24 flexibility in some of the designs. 25 So I found a better product off-exchange than 1 on exchange, actually. 2 Let me talk a little bit about 3 sole proprietors, because that question had come up 4 earlier. 5 The sole proprietors lost a lot. 6 As a sole proprietor, I bought my insurance 7 through the Albany Chamber of Commerce. 8 Sole proprietors, according to New York law, 9 were allowed to get the group rates, with an 10 increase factor of 15 to 10 percent, which was 11 affordable. 12 Now, beginning in -- January 1st of this 13 year, of course, "sole proprietors" are now defined 14 by the Affordable Care Act as being in the 15 individual market, because the "group market" is now 16 defined as "2 to 50," and soon to be "2 to 100" in 17 2016. 18 I think that was the biggest impact. 19 There's no evidence that ever showed that 20 sole proprietors are a higher risk than any employer 21 of two or three, so I think sole proprietors have a 22 legitimate place in the group market. 23 Although, the Affordable Care Act does make 24 mention of the group market size, and I think that's 25 what we went by, trying to follow the 1 Affordable Care Act guidelines, I think there's 2 ample opportunity for the State to look at 3 legislation that would make -- roll our marketplace 4 back and allow the sole proprietors to enjoy group 5 benefits as well. 6 We did that before; we allowed sole 7 proprietors to enter the group market a number of 8 years ago, and legislation was written that way, and 9 it also allowed a little bit of a markup for the 10 carriers to do so. 11 I don't see any reason why we can't do that 12 again. 13 The states are the place where 14 experimentation are supposed to happen in the 15 insurance marketplaces. 16 And New York already had a viable market. 17 I think the Affordable Care Act itself is one 18 that had the biggest impact on us, and it wasn't 19 necessarily a positive impact because of some of the 20 requirements. 21 And I think somebody mentioned earlier, you 22 were able to buy an insurance product without 23 prescription drugs. 24 You can't do that now in the individual or 25 small-business market, and you have to meet 1 essential health benefits or else you pay the 2 individual penalty. 3 I think there's some opportunity here for us 4 to at least negate some of the impact on the 5 sole-proprietor market, and allow them to buy 6 insurance through the group market as well. 7 And I think with legislation we can do that 8 one. 9 I don't think we'd lose any cost -- any 10 revenue-sharing from the federal government. 11 I don't think we'd lose any grants by doing so. 12 I think it's something we need to seriously 13 look at during this session. 14 I also want to talk about, we haven't talked 15 it be much at all, the small-business tax credit, 16 because that did come up. 17 That's something that I think, the 18 anticipated amount of money to be spent on the 19 small-business tax credit was probably in excess of 20 3 or 4 billion dollars. 21 I doubt that we've even hit $1 1/2 billion in 22 small-business tax credits nationally. 23 I think that's because the people don't 24 understand how the small-business tax credit works, 25 even though the IRS has on their website, something 1 that says "Three simple steps." 2 There aren't three simple steps to 3 determining whether you have a small-business tax 4 credit. It takes more than that. 5 It's not that complex that it can't be 6 understood, but I think the communication of it and 7 the understanding of it is something that's been 8 lacking. 9 Part of my days off, if you will, have been 10 spent instructing employer -- brokers on being able 11 to be certified to sell in the small-business and 12 the individual exchange. 13 So that's -- I've spent a lot of time talking 14 to brokers about how they can use the small-business 15 tax credit, help them understand it better, to help 16 their clients. 17 We haven't seen a lot of activity in the shop 18 market. 19 I'll be honest, I've taught over 400 brokers 20 in the shop and the individual marketplace in 21 certification classes. 22 I don't think I've talked to anyone who's put 23 anybody through the shop at this point. 24 Individual exchange, certainly, that works. 25 I think a lot of them are defaulting to 1 the -- selling the business directly with the 2 carrier as opposed to going through the shop. 3 The shop offers some advantages. 4 The small-business tax credit that Donna 5 mentioned earlier certainly is one of them. 6 And I think the opportunity to offer multiple 7 carriers and multiple plans is something for 8 employers that's offered through the shop, that you 9 won't get if you sell directly with a carrier. 10 But I think most of us, right now, are 11 concerned about the complexity of trying to sell 12 through the shop. I don't think it's well 13 understood. 14 Donna and her staff have agreed to work with 15 us, to run some seminars through the next part of 16 2014, so we can get our people more comfortable with 17 selling through the shop and using that as well. 18 Finally, I think you did ask in some of your 19 testimony, about whether the State made the right 20 choice when they adopted not to allow carriers to 21 maintain the same plans that were canceled. 22 And I think they absolutely did. 23 And I think the timing of that -- the 24 legality of it being questionable on a federal 25 level, in the first place, but the timing of it was 1 such, that there was no time for any carrier to get 2 any communication, any rate filings on plans that 3 had, thus, been discontinued. 4 So I think we absolutely did make the right 5 decision, in deciding not to extended those plans 6 that had been canceled, going into 2014. 7 We had enough of a road -- we had enough road 8 bumps in 2014 -- January 1st of 2014 without that. 9 I think that would have added to the 10 confusion. 11 I think we made the right move by not doing 12 so. 13 With that, thank you very much for your time. 14 ERIC P. NEVINS: Hi, my name is Erin Nevins. 15 I am the owner, founder, and president of my 16 own insurance agency here in Albany, from 17 EP Nevins Insurance Agency. 18 I'm also the president-elect of the 19 National Association of Health Underwriters local 20 chapter for my industry, as well as a member of the 21 board for the state legislative board for that 22 organization. 23 Dan actually taught me through that process, 24 and I am certified to sell in the New York State 25 exchange, as well as with small businesses and 1 individuals and sole proprietors. 2 What I would like to say is, I thank you very 3 much for the opportunity to be here and speak to you 4 candidly about what is going on. 5 I think that brokers have a unique 6 perspective that really encompasses almost 7 everything that you heard here today. 8 Brokers assist members in purchasing 9 insurance. 10 They work with the providers to ensure that 11 the providers are participating for these members. 12 And, we help people with their carriers when 13 there's issues that arise from their insurance 14 carriers. 15 So, the one group of people that actually 16 physically touch almost every piece of health 17 insurance are brokers and agents. 18 I represent a vast number of individuals, 19 sole proprietors, chambers of commerce that are 20 county wide, as well as small businesses, and that 21 is my specialty with employee benefits. The health 22 insurance is a large portion of that. 23 I daily speak to sole proprietors and small 24 businesses that are very concerned and very upset 25 about the loss of their previous coverage, from a 1 few points: 2 Cost: Not just monthly premium costs, but 3 out-of-pocket costs as well; 4 And then, also, their access to networks. 5 I just want to go back to, Senator Martins, 6 you had mentioned something in one of your exchanges 7 with a panelist, about the decrease of insurance 8 costs and the increase in the individual market. 9 And I want to make a distinction, that, 10 routinely, before 2014, individuals that had no 11 affiliation through a business or a 12 sole proprietorship to -- into the group market, the 13 pricing for individual insurance in our state was 14 extremely high. 15 The average cost about $900 a month for an 16 individual in the upstate market. 17 Downstate, of course, is more. 18 What has happened is, we have adopted the 19 ERISA language that dictates that sole proprietors, 20 and small businesses that are husband/wife joint 21 ventures, have now been forced to now be in the 22 individual marketplace, so, you have increased their 23 pricing to decrease the individual marketplace. 24 There's a true distinction about what makes 25 up that individual market previous, and going 1 forward. 2 And I wanted to make that point to you, 3 because it is a true distinction. 4 We have -- my agency has spent a long period 5 of time educating employers and sole proprietors 6 about high-deductible health plans, consumer-driven 7 health plans, how to use their insurance to the best 8 of their ability in an economical way, while also 9 putting funding arrangements alongside of it to be 10 able to afford their out of-of-pocket costs. 11 Those plans in 2013 that we were selling had 12 a 675,000-provider-strong in-network network; now, 13 totally inaccessible to all of these people that 14 were routinely enjoying that network. 15 I'm not even talking about the out-of-network 16 capability. I'm talking about the in-network. 17 So, that was a real big hit to that market 18 segment, and, it's hurt every day, because they call 19 our office and they're very upset about it, when 20 they're trying to select new plans that only 21 incorporate, maybe, 23 county service areas with 22 very limited providers, as well as limited 23 prescription drugs at this point. 24 The cost of those plans that we have been 25 selling and educating and pouring all of our energy 1 and time into routinely cost about $150 a month in 2 the small-group market/sole proprietor cost. 3 They have risen to a 50 -- or, a 100 percent 4 increase, to $300, which doesn't sound like much, 5 but you have also increased their out-of-pocket 6 liabilities on the deductibles and out-of-pocket 7 maximums. 8 So, it's not just the premium that has 9 increased for these people that were going along 10 satisfactorily for the last two or three years, that 11 have really been adjusting their incomes to pay for 12 their out-of-pockets in a different way. 13 Now they're being hit by the premium as well 14 as increased out-of-pockets. 15 So, network accessibility and costs 16 associated with the premiums, as well as the 17 out-of-pockets, has been a big, huge impact to these 18 people. 19 I have a husband-and-wife doctor practice in 20 Dutchess County, engaged in a legitimate business, 21 that are now considered to be in the individual 22 marketplace, and are totally upset and insulted that 23 they cannot have a national network that they 24 previously had had or out-of-network capability. 25 And, the language in ERISA goes back to 1 stating that, "husband and wife." 2 And I don't understand why that has happened, 3 but, just because you're married doesn't mean you're 4 not actively participating in a business. 5 So, that has been a big, huge problem for 6 that region, as well as broker compensation. 7 You know, we touch so many people. 8 We educate people. We help them with claims 9 resolutions. We help them pick a plan. We help 10 them understand the plan. 11 We do so many things for so many people, and 12 we are compensated by insurance companies, not by 13 the individuals or the constituents that we 14 represent. 15 But, as this whole thing has unfolded for 16 2014, routinely, we are no longer compensated on 17 certain products, we are no longer compensated on 18 market segments, of which we were previously 19 compensated. 20 So all of these sole proprietors and 21 husband-wife joint ventures, if they move to an 22 insurance company that does not compensate for 23 individual plans, we lose compensation, but they're 24 still our clients. 25 So we're trying to run our businesses and 1 continue to be a resource. 2 We have always been a resource for these 3 people, especially now when things are so 4 complicated and confusing, and they really are 5 relying on us to assist them. And now we have to 6 say, Well, I can't help you with this, but I can 7 help you with this. 8 Of course, we're not going to say that, 9 because we would never practice that way, but, you 10 know, over time, we will have to adjust our business 11 plans to not broker for certain market segments, and 12 that leaves a gaping hole for those people. 13 Navigators are great, and they're doing what 14 they were asked to do, which is to enroll people. 15 But, brokers and agents are more than just 16 enrollers. We are consultants to these people. 17 SENATOR HANNON: We have to hear from 18 Mr. Smith. 19 ERIC P. NEVINS: Oh, I'm sorry. 20 Well, I thank you. 21 SENATOR HANNON: You were great. 22 I've been trying to cut in, but you didn't 23 even take a breath. 24 ERIC P. NEVINS: Sorry. 25 [Laughter.] 1 ERIC P. NEVINS: Well, I appreciate the 2 opportunity. 3 SENATOR HANNON: I had asked before that 4 people not read. 5 I didn't realize you were so passionate that 6 you'd speak longer. 7 ERIC P. NEVINS: Sorry. 8 SENATOR HANNON: No, everything you said was 9 very [inaudible]. 10 ERIC P. NEVINS: I put some information in 11 your packets. Please feel free to reach out. 12 SENATOR HANNON: Thank you. 13 JACK SMITH: Thank you. 14 I'm Jack Smith. I'm executive vice president 15 of William A. Smith and Son. 16 We're a third-generation insurance firm in 17 the Mid-Hudson Valley. We've got offices in 18 Newburgh, Montgomery, and Poughkeepsie. 19 We work with people on, not only their home 20 and auto and business insurance, but also on their 21 health insurance. 22 We've got about 1,000 health-insurance 23 clients that are clients of ours with, say, their 24 business insurance, but, also, we have a 25 relationship with the Orange County Chamber of 1 Commerce. We're a joint-venture partner with them 2 to provide health-insurance advice and sell product 3 to their constituents. 4 So, what I'm going to talk about comes from 5 that experience. 6 Much of what I would have normally have said 7 has already been covered, so I'll try to keep it 8 pretty short. 9 And, I'm also on the board of directors of 10 the Independent Agents and Brokers Association of 11 the State of New York, and speaking on behalf of our 12 members as well. 13 A couple of things that I just want to 14 reiterate, they've already been touched on, but, the 15 loss of out-of-network coverage is tremendous in our 16 area. A large number of our clients would normally 17 go to New York City for various procedures. 18 Sloan-Kettering comes to mind, you know, 19 frequently, when somebody finds out they have 20 cancer. 21 And, you know, with the removal of the 22 out-of-network coverages, they can't do it, you 23 know, and that's when -- when we have to tell people 24 that, when we're explaining to them what the 25 differences are between exchange and non-exchange 1 products and networks, and so forth, and they find 2 that out, that they feel like they've been let down. 3 You know, I would say, from the standpoint of 4 our government, whether it be federal or state, 5 I think your constituents feel let down that they 6 lost this. 7 And it's important that, through the 8 legislation that I know has been introduced, or is 9 in the process of being introduced, that that be put 10 back in, because it's extremely important for 11 people, you know, not only for a situation like 12 cancer, but, also, you know, look at somebody whose 13 child is in college, and maybe is going to school in 14 the University of Connecticut, or someplace like 15 that. 16 If they don't have network coverage, they've 17 now got to come back to New York State to seek 18 treatment, because they can't see a doctor in 19 Connecticut or Massachusetts or Maine or 20 North Carolina, or wherever they might be going to 21 school. 22 You know, that hasn't really been talked 23 about at all, but that's, you know, important as 24 well. 25 You know, also, if you look at business 1 owners who might spend part of the year, or a couple 2 months of the year, in a different state, again, if 3 their doctors -- if they don't have out-of-network 4 coverage, they're now losing the ability to seek 5 treatment when they're somewhere else, though they 6 are residents of New York and they pay taxes in 7 New York, but they're -- you know, they're losing 8 that ability. 9 The "sole proprietor" issue has been 10 discussed. 11 Again, that's -- we've seen that time and 12 time again with our chamber clients. 13 It's a huge dilemma and it really does need 14 to be fixed. 15 I won't reiterate what's already been said. 16 You know, the price of insurance and net cost 17 I think is something that often gets confused. And, 18 while premiums, in some cases, may go down because 19 of these higher deductibles and out-of-network 20 costs, their total cost of health care has not gone 21 down, and I think that's, you know, a big issue. 22 People are trying to reduce premiums by 23 increasing deductibles and other out of -- you know 24 costs, the cost-share mechanism, and so they're 25 really not decreasing their cost of insurance and 1 health care when you take all of that into account. 2 I would say that the shop exchange, the 3 small-business exchange, has not been a great 4 success so far, and because of the reasons that have 5 already been discussed. 6 Again, we're working with, you know, several 7 hundred to a thousand employers, and I think we've 8 placed one person in the shop exchange, one small 9 business. 10 So, that really has not, you know, made an 11 impact thus far, and I don't think that was the 12 intent. 13 I think the intent is for that to make an 14 impact, and for us to be able to place businesses 15 there, so that it does create more coverage for 16 employers. 17 And, you know, I would say, while the 18 Health Department has done a great job with the 19 exchange in the small amount of time that they had, 20 and the website is phenomenal, there's still work 21 that needs to be done on the back end, which is the 22 transmission of data from the exchange to the 23 carriers. 24 And that's, I think, some of the issues that 25 we're having, relative to people not having their 1 ID cards, and, when we try to call a carrier on 2 behalf of a client, and they can't answer our 3 questions because they don't even know they're one 4 of their insureds yet, you know, I think that's 5 probably a technology issue, which I'm sure will be 6 handled down the road, but, you know, that is an 7 impediment at this point in time. 8 And, really, that's all I have to offer, 9 because everything that I wanted to talk about has, 10 really, already been talked about by so many people 11 today. 12 SENATOR HANNON: That's the disadvantage of 13 going third. 14 JACK SMITH: Yeah. 15 SENATOR SEWARD: Just two quick questions. 16 The low shop participation, shop-exchange 17 participation, could you just summarize, you know, 18 why that -- in your view, why that is occurring? 19 JACK SMITH: In our opinion, there's 20 two reasons. 21 Number one, it's difficult to navigate in a 22 logical way as a broker for a client. 23 And what I mean by that is, in so many lines 24 of insurance now, there are things called 25 "comparative rating," where we can put data in for 1 one client and see multiple carriers' information, 2 and then we can talk them through what's what. 3 That doesn't exist. 4 I think that's a fairly easy fix, and I think 5 that would help. 6 As was discussed already, the tax-credit 7 benefits I think are probably confusing, and may not 8 be, you know, fully understood. And, some people 9 just aren't qualifying for them. 10 I know, in our case, you know, some of the 11 people that we've tried to see if there was a way 12 for them to utilize that, it just hasn't worked out 13 where it's been better and they would want to buy 14 one of those plans, because they would then be 15 losing their out-of-network coverage. 16 So it's kind of that twofold purpose. 17 And the out-of-network coverage is also a 18 huge consideration about buying a plan in the shop 19 exchange, because if it doesn't exist, they don't 20 want to, you know, lose what they had. 21 SENATOR SEWARD: Yeah, it's just -- the 22 product doesn't stack up very well, as compared, 23 yeah. 24 Just one final question, in terms of the -- 25 your experience with these -- with the navigators, 1 have you had any experience there? 2 You know, they -- they do the three-day 3 training, and, without a background check, without 4 any educational background requirements, but they do 5 have the three-day training and they do pass an 6 exam. 7 What has been your experience, if any, with 8 these navigators -- with navigators? 9 Who I think have an important role to play, 10 in terms of outreach, but when it comes right down 11 to it, in terms of really advising someone, you 12 know, I think the agents and brokers are in a much 13 better position to do that. 14 But, can you -- have you had any experience 15 that you can share with us, briefly, in terms of: 16 Have they overstepped their bounds in any 17 way? 18 Or, do you think it's a -- have you had any 19 referrals from the navigators? 20 JACK SMITH: I know, in our situation, we've 21 had no experience with navigators. 22 ERIC P. NEVINS: I personally have. 23 I do broker a large countywide chamber of 24 commerce, and at the onset of this, my chamber 25 president was approached by another group that had 1 solicited to be the navigator for that region. Had 2 not won the reward yet, but was already meeting with 3 our chamber of commerce, my client. 4 And, once they did actually receive their 5 award, so, we know who they are. 6 We've -- we've given many different 7 conferences and forums for all of the chamber 8 members. 9 They've attended every one of them and taken 10 lots of notes. 11 And at the onset, I think a lot of brokers 12 were upset. They thought that navigators would be 13 overstepping and taking business from them. 14 And, actually, it's turned out to be quite 15 the opposite, where we've had some of our clients 16 mosey on over and take a peek at them, and then 17 we're told, "Uh, I think you need a broker," and 18 then referred right back to us. 19 So, I don't know that they are trained well 20 enough. 21 I know they know the process on how to enroll 22 somebody, but I don't know that they're trained well 23 enough to understand, and how to explain differences 24 in carrier networks, prescription-drug formularies, 25 and I could go on and on. 1 I don't think that -- I think that they are 2 just there to specifically get people enrolled. 3 As far as educating them, I don't think 4 that's part of their task, and I -- so that's ours. 5 DAN COLACINO: Yeah, my experience has been 6 mostly with hospital-based navigators. I think they 7 were formerly Medicaid-facilitated enrollers, and 8 they moved over, so they were kind of familiar with 9 how the Medicaid program worked, and so forth. 10 So, we've actually, when we had to refer 11 individuals to a navigator, we would send them to 12 the hospital-based navigators. 13 And I think they had that -- they had a head 14 start on everybody else because, again, they were 15 Medicaid facilitators and enrollers, and they 16 understood the process to start with. And we're 17 more comfortable than sending them to 18 community-based people right now. 19 SENATOR SEWARD: Thank you. 20 Thank you very much for appearing. 21 SENATOR HANNON: Thanks. 22 ERIC P. NEVINS: Thank you. 23 SENATOR SEWARD: Our next panel are 24 small-group insurers: 25 Bob Carey, who's an account executive of 1 Otsego County Chamber of Commerce; 2 Leslie [sic] Clarke, deputy director of 3 Freelancers Union Insurance; 4 Mark Eagan, president and CEO of the 5 Albany-Colonie Regional Chamber of Commerce; 6 And, Maurice Isaac, who's employee benefits 7 program administrator of the Delaware County 8 Chamber of Commerce. 9 And we're going ask Mr. Eagan to lead off 10 this panel. 11 MARK EAGAN: Good afternoon. 12 I'm Mark Eagan, president and CEO of the 13 Albany-Colonie Regional Chamber. 14 We have a membership of 2200 businesses that 15 come from throughout the Capital Region, and they 16 employ about 110,000 area residents. 17 Appreciate the opportunity, and I commend you 18 for hosting the hearing today, and I appreciate the 19 opportunity to share a little bit of the feedback we 20 received, particularly from the small-business 21 community, within the limitation of the 22 Affordable Care Act in New York. 23 I guess I'd start by making just a couple of 24 comments about the exchange itself, for businesses 25 who look to use the exchange. 1 And I would say that, that the first piece of 2 feedback, for those who wanted to, quote/unquote, 3 shop the exchange, we received quite a bit of 4 feedback that they thought it was difficult to 5 window-shop, because they had to go in and set up an 6 account. And I think a lot of them had concern, if 7 they set up an account, were they going to almost be 8 sort of trapped within the portal. 9 So I think, just as some suggestions on how 10 it can be improved, going forward, if it was easier 11 to see what's available without having to set up an 12 account and go through that formality. 13 Within our membership, we have a lot of 14 businesses who gather -- gain health insurance 15 through our organization, so, some of my comments 16 will be respective to those folks, and others will 17 be businesses who just gather health insurance from 18 a lot of different places, and feedback that we've 19 received. 20 First, from the sole proprietors, those who, 21 you know, are independently employed, who get 22 coverage through us: 23 Many of them were really shocked and angered 24 when they learned that they were no longer 25 considered a business in buying health insurance 1 when they went to purchase insurance, with the 2 Affordable Care Act. 3 As you folks know, they are now classified as 4 an individual. 5 And many of them, you know, called our office 6 and complained, and said, you know: We believe the 7 only reason we were asked to now buy as an 8 individual, is we're helping to subsidize insurance 9 for other individuals. We worked hard to create a 10 business, and we'd like to be able to continue to 11 purchase as a business. 12 Obviously, when they went to buy it on the 13 individual exchange, most of them experienced 14 significant increases in their premiums. 15 The other piece that we heard from our 16 sole proprietors, was things that they would 17 discovered as they went through the process, and one 18 of them that we got several calls about was, no 19 out-of-network coverage. 20 So, whether they're out of state, whether 21 they have their children away at college, they 22 weren't sure how that worked. 23 And these are, either, they did it through 24 the exchange or they continued to get insurance 25 through our organization. 1 Also, as you know, we have some new insurance 2 carriers that are offering coverage in New York. 3 And we're getting some feedback from the -- 4 where a business says they've checked to see, was 5 their current provider going to offer that 6 insurance. 7 It appeared so, yes, when they went to a 8 website and looked, but then when they actually 9 called it -- the office, they said they don't accept 10 that coverage. 11 So I don't know if that's still just part of 12 rollout, but that's a frustration that we're hearing 13 from our sole props. 14 From the small-business community, those who 15 are from 2 to 50 employees, really what we 16 discovered, if they were getting insurance through 17 us now, we mapped them with our carriers to the 18 product that was closest to what they currently had. 19 As you know, none of the products remained, 20 you know, 100 percent as is. 21 And we realized that almost all of those 22 businesses, wherever they were suggested, wherever 23 they were mapped to, navigated to, that was the 24 coverage they continued to keep. 25 So it -- from what we can tell, most of those 1 businesses didn't even explore looking at the -- the 2 exchange, going to the website or the marketplace. 3 I don't know if it's because it's the first 4 year and they're not sure what the impact would be 5 for them or what the benefit would be for them or 6 their employees, but it appears most, if they were 7 able to maintain the status quo, that was the route 8 that they elected to do. 9 So with that, those are my comments, Senator. 10 Thank you. 11 SENATOR HANNON: Thank you. 12 Who would like to go next? 13 MAURICE ISAAC: Yes, I'll go next, Senator. 14 I'm Maurice Isaac, with Mang Insurance 15 Agency, and I'm the benefits administrator for the 16 Delaware County Chamber. 17 And I kind of just wanted to go through my 18 experience, you know, since the exchange opened. 19 I completed the CE course the Saturday, on 20 September 29th, so I could be one of the first 21 agents eligible for the exchange. 22 I still did not receive my invitation till 23 October 4th, four days after the exchange opened, 24 even though I qualified and passed all the exams. 25 In trying to set up my broker's account, it 1 took five complete days of trial and error with the 2 exchange before I could get that satisfied. 3 And I got -- finally on the 9th, I got a 4 "Congratulations, your brokerage account is open," 5 with various technical problems. 6 With the chamber, I've got -- I think, 7 through the two chambers, I have approximately 8 90 self-employed sole proprietors, that all of their 9 are plans were canceled, so I had to set up meetings 10 throughout the next three months with them. 11 With them at the help desk, sometimes we 12 waited 45 minutes to reach someone, while the client 13 was sitting with me, because it said -- you know, 14 when you needed help. 15 There was times where we waited 20 minutes, 16 and the person who answered stated they couldn't 17 help us, we needed to be transferred. And, again, 18 we waited another 20 minutes, with the client 19 sitting there with us. 20 The help desk has stated at times, that, you 21 know, We would get back to you within 48 hours. 22 We never heard from them. 23 When I called back, the help desk says, 24 "Well, do you have a ticket number?" 25 And I says, "No, I didn't receive a ticket 1 number. Am I supposed to?" 2 And they said, "Yes." 3 So the next time I had an issue, I tried to 4 insist that I get a ticket number, so if I needed to 5 follow up and call back, I had it. 6 At that time, I was told that we don't -- 7 "We don't issue ticket numbers," in direct 8 compliance to, you know, what I was told the last 9 time. 10 There was many times where we had programming 11 errors, and the help desk just stated: Look, 12 everyone's having this here, they're having 13 problems. You're gonna have to try again tomorrow. 14 Tell your client, you know, they're gonna have to 15 reschedule an appointment with you. 16 And these -- some of the clients in 17 Delaware County, it's a huge county, they drove 18 30, 35 minutes, just to get to me. In inclement 19 weather, you know, and they would have to turn 20 around and drive 30 minutes home, and then back and 21 forth again. 22 The biggest help-desk issue we had was, on 23 12/10, it was -- after we put all the information 24 in, it was stated that it could not make a 25 determination. 1 On the 13th, they finally made a 2 determination that there would be no subsidy. 3 On 12/16, when we went -- when the client 4 wanted to pursue and get a policy anyways, when we 5 went to confirm and check out, we received an error. 6 The help desk said, "Keep trying again 7 tomorrow. We're gonna work on it." 8 Three days later I sent a picture of the 9 problem into the technical support, and, you know, 10 that was on 12/19. 11 That afternoon, I actually got an e-mail from 12 a regional director of the Department of Health, 13 stating that problem -- that issue was corrected, 14 and that they assigned someone to follow up with me 15 by phone. 16 She gave me instructions -- they gave me 17 instructions on how to enroll the client further. 18 I tried that and it did not work. 19 Eventually, the person called every day, that 20 they assigned to help me, and we could not -- we 21 could not get the coverage put through. 22 On 12/21, with only two days left to get this 23 client enrolled for January 1st, I resent the error 24 message to technical support and that regional 25 director, stating that we have still been unable to 1 enroll this client. 2 And I immediately, from the regional 3 director, received an out-of-office message that 4 says, "I'm going to be out of the office until 5 January 1, 2014. I have a person who is here to 6 help you. Here's their e-mail address, please 7 contact them." 8 I forwarded the e-mail to that person, and 9 I've never heard from either one of them. 10 On the 27th I received a phone call from -- 11 the person that was helping me on the phone stated: 12 The problem has finally been corrected, and we did 13 install their plan, but it's not gonna be effective 14 until February 1st. 15 That was after -- on 12/23, the last day, 16 I enrolled that client directly with a 17 Blue Cross and Blue Shield plan, that they've paid 18 for, and had to, you know, come into the office that 19 day, to make sure they had coverage for January 1st. 20 Applications that -- on individuals, to date, 21 I put in 58 applications for the exchange, and I've 22 enrolled 49. 23 Out of the 49, I believe about 10 percent of 24 them were enrolled into Medicaid that qualified for 25 it. 1 For applications for the shop exchange, 2 I have two, and enrolled -- enrolled one client in 3 the shop exchange. 4 One client that I had was an individual 5 family that has one child in college, that's 6 20 years old. They have two children under the age 7 of 19 that are still in high school. 8 Their eligibility determined that they'd have 9 a $414 a month subsidy on the Silver plan for the 10 complete family. 11 The premium was $1,370. Their net premium, 12 after the 414, is 955. 13 And, also, even though they already qualified 14 for a family plan, the exchange notified us that the 15 children under 19 were eligible for 16 Family Health Plus, and were forced to go into 17 Family Force Plus, and they were charged an 18 additional $60 on top of an already-family plan that 19 they're paying. 20 And we were told that there's no way to 21 circumvent that. Once that they qualified for 22 Child Health Plus, they had to pay the additional 23 funds. 24 The clients eventually did enroll in that 25 plan to get their subsidy, but are paying $60 extra 1 even though they're already paying for a family 2 plan. 3 My clients are mostly small groups, 4 sole proprietors, partnerships, LLCs, and 5 corporations. 6 One client is an attorney with a newly opened 7 firm less than two years old, and that's a 8 corporation. 9 This year, she promoted that second attorney 10 to a partner, and now they're equal shareholders. 11 Both are drawing a salary, and, they file a 12 New York 45 quarterly; however, they're now 13 classified as individuals because they're both the 14 owners of the corporation, and now they're required 15 to pay $39 a month more, each, for the same exact 16 plan that's available for small businesses. 17 This attorney decided and elected not to take 18 the plan, based on that, and has taken the penalty. 19 With having all small groups, every plan 20 [unintelligible] everyone that I had was canceled, 21 and those clients had to choose a new plan: either 22 move through to the exchange, move to the direct 23 market, or go -- or directly through the carrier. 24 The President did announce that you were able 25 to keep your existing plan for one more year, our 1 phone started ringing off the walls. 2 Clients that we already had moved into new 3 plans and already sent checks in, called up, wanting 4 to move their plans back to their old plans. 5 And we had to explain to them it wasn't 6 available. 7 Chamber members, as a whole, were very split 8 on -- some were happy to have our help, and will 9 continue to be members. 10 Some members stated right out, that they 11 don't need the chamber anymore, and this is the last 12 time we're gonna pay our -- that was -- last year 13 was the last time they're paying their dues and 14 they're not gonna renew their membership. 15 In summary: 16 Some clients were very happy. They chose a 17 plan that was better than the one that they had, for 18 the same or less money. 19 Some clients were determined to be eligible 20 for Medicaid, and were very unhappy and very upset, 21 stating that, you know, "We don't want to be in 22 welfare." And they actually purchased a direct plan 23 outside the exchange and are paying full price. 24 Some sole proprietors are paying 50 percent 25 more to 100 percent more in premium for less 1 coverage than they had in their old higher -- 2 high-deductible plans. 3 SENATOR SEWARD: Thank you. 4 MAURICE ISAAC: Thank you for this 5 opportunity to share that with you. 6 SENATOR SEWARD: Thank you very much. 7 Mr. Carey. 8 BOB CAREY: Hello, I'm Bob Carey. I'm with 9 the Mang NBT Insurance Agency as well, and, I'm an 10 account executive. And, I am the benefit 11 administrator for the Otsego County Chamber. 12 I do want to mention that our agency handles 13 five different chambers as benefit administrators. 14 Maurice is one of them. 15 And I was asked to come here on behalf of the 16 Otsego County Chamber, to talk about the 17 difficulties and problems, as well as their feelings 18 towards the -- what's been happening within this 19 last year. 20 The chambers, as a whole, have spent many, 21 many years, in concert with the Legislature here in 22 New York, to create the "sole proprietor" product 23 line, and the "sole proprietor" product line came 24 about because of the input of the chambers, with the 25 State legislators and the Insurance commissioner, 1 and they created what's called the "Chamber Trust 2 Product." And that Chamber Trust Product did have 3 small-group products, 2 to 50, and it typically had 4 the "sole proprietor" product that was mentioned, 5 that is 10 to 15 percent more. 6 With the Affordable Care Act, and no reason 7 that -- or, New York didn't do anything to create 8 this, but the Affordable Care Act created the 9 situation where the individual sole proprietor is 10 being moved to the individual market. 11 What we had discovered when that happened is, 12 within our chambers, anywhere between 25 and 13 90 percent of chamber revenue on that product line 14 will be lost because of these chamber members moving 15 to the individual market. 16 So from a chamber's perspective, that was a 17 revenue stream that helped chambers do their good 18 work of promoting small businesses in the community, 19 and the economic-development work that they do, and 20 all the other things. 21 So, from the chamber's perspective, this law 22 has been a real shot in the arm as far as revenue. 23 On the small-group side, the executive 24 director of the exchange had mentioned she wasn't 25 sure how many plans were canceled. 1 I just want to mention that, in our 2 marketplace, 100 percent of all small-group plans 3 were canceled for January 1st, because they did not 4 comply with the essential health benefits. 5 So, every one of our clients received a 6 letter that their plan was being canceled. 7 That means every single participant received 8 a letter that their plan was gonna be canceled, and 9 that they would be mapped to a plan that was 10 compliant with the Affordable Care Act. 11 When the State Legislature -- or, when the 12 Insurance Department and the exchange created the 13 Platinum, Silver, Bronze, and Gold plans, they 14 created standard plans. 15 And if you study those plans, most small 16 businesses in this state had plans that had 17 deductibles and coinsurance, but they also had 18 co-pays for many items. And those deductibles and 19 coinsurance would only apply to certain 20 circumstances, like hospitalization, or outpatient 21 surgery, and all your other services were 22 co-pay-based. 23 When the new plans in our marketplace came 24 out, the plans that they were going to be 25 automatically mapped to, and that employer might 1 have had a $1,000 deductible on their plan; that 2 $1,000 deductible only if you were hospitalized. 3 That $1,000 deductible in the mapped plan is 4 now in front of all the co-pays, and there are only 5 a handful of plans by one carrier in our marketplace 6 that has co-pays in front of the deductible. 7 So, it created a tremendous amount of stress 8 in the broker community to reach out to all their 9 clients, to explain that they were being mapped to a 10 plan, and, yes, the premium is less, but all your 11 participants are gonna be subject to this deductible 12 in front of their doctor co-pay. 13 So, from our perspective, it created a 14 tremendous amount of stress on our staff, on our 15 brokers themselves, and, on our clients, because 16 they didn't understand the products, they didn't 17 understand how they worked, they didn't understand 18 the mandates that they had to have, that they didn't 19 necessarily need. 20 So from our perspective, although, as 21 mentioned before, the 12,000 people in the 22 direct-pay market received a substantial discount on 23 their premium, but many of the other people are 24 gonna have higher costs, maybe a lower premium, but 25 a lot more out-of-pocket in the plan itself in 1 cost-shares. 2 Additionally, I think agencies and chambers, 3 going forward, are going to be reassessing their 4 model as to their staffing, because if we're gonna 5 lose 25 to 90 percent of our revenue stream, we're 6 going to have to work on our staffing as well. 7 And, so, this has created an additional 8 stress on the industry, to staff properly in a 9 environment where there's more inquiries coming into 10 the agency. 11 I have some other notes, but I won't touch 12 upon those because they've already been discussed. 13 Thank you. 14 SENATOR HANNON: Thank you, Mr. Carey. 15 And, finally, Ms. Clarke. 16 LACEY CLARKE: Hi. Thanks for inviting 17 Freelancers Union to testify today. 18 I'm Lacey Clarke, director of policy for 19 Freelancers Union. 20 Freelancers Union has been providing health 21 insurance to New Yorkers since about 2001. 22 For the first several years that we existed, 23 we offered health benefits to independent workers 24 through a portable benefits fund. And then, 25 eventually, we decided to start our own 1 health-insurance company, rather than simply 2 connecting our members to others' plans. 3 Freelancers Insurance Company (FIC) was 4 created in 2009 as a demonstration project, with 5 bipartisan support from the New York State 6 Legislature. 7 It's the first several-purpose 8 health-insurance company to offer independent 9 workers affordable, stable, and portable health 10 insurance, and is wholly owned by Freelancers Union. 11 FIC aims to provide insurance to the 12 30 percent of the workforce -- freelancers, 13 consultants, temps, contractors, and the 14 self-employed -- who are excluded from traditional 15 work-based supports. 16 FIC covers about 25,000 New Yorkers through 17 5 health plans designed and tailored specifically 18 for freelancers. 19 In 2012, we launched Freelancers Medical, an 20 innovative patient-centered primary-care program 21 that offers free primary care with zero-dollar 22 co-pays for all visits, free yoga, acupuncture, 23 medication, and other wellness classes. 24 Enrollment has already surpassed 25 expectations, with more than 3500 members signed up 1 after only 12 months, and we're excited to open our 2 second location in downtown Manhattan next month. 3 And despite this new offering, members have 4 seen zero premium increases for two consecutive 5 years. 6 FIC was created in 2009 before the 7 Affordable Care Act was enacted and greatly changed 8 the health-care marketplace. 9 In 2012, this Legislature recognized the 10 potential upheaval that the ACA could cause in the 11 individual health-care market, and wisely extended 12 the sunset date for the demonstration project for 13 one year, until the end of 2014, to ensure that 14 FIC members would have a smooth transition during 15 the first year of the health exchanges. 16 At the end of 2012 and in early 2013, the 17 federal government promulgated numerous rules and 18 regulations in preparation for the ACA's 19 implementation in 2014. 20 As we followed the events, it became clear 21 that several our very popular health plans would 22 need to be altered at a great expense. 23 Additionally, more than 70 percent of our 24 members, most of whom are middle-income earners, 25 would not qualify for subsidies on the exchange and 1 would see significant increases in their monthly 2 premiums. 3 However, thanks to the forward-thinking of 4 Chairmen Hannon and Seward, this Legislature 5 reaffirmed FIC's ability to continue to offer and to 6 afford both comprehensive plans for these 7 independent workers through the end of 2014. 8 We are very pleased to report that FIC 9 members have not experienced any disruption in 10 coverage, and 97 percent of members renewed their 11 existing coverage in December for another year. 12 In addition to FIC, Freelancers Union also 13 owns a health-care technology company that provides 14 back-end services to insurance companies in several 15 states, including New York; New Jersey, whose 16 exchange is run by the federal government; and, 17 Oregon, who runs their own exchange. 18 Our experience working with both the federal 19 and another state exchange has only highlighted the 20 exemplary work that New York State has done in their 21 exchange and in managing the implementation process. 22 The New York -- an insurance company we 23 provide consulting services for had very few delays 24 in enrollment. New Yorkers were able to easily 25 enroll on their on exchange -- on exchange plans 1 from day one, and exchange staff has been 2 well-informed and accessible throughout the process. 3 While Freelancers Insurance Company does not 4 currently offer health coverage on the 5 New York State exchange, Freelancers Union is 6 committed to ensuring that our members transition 7 smoothly onto the exchange for 2015. 8 Our focus in the upcoming months will be to 9 educate our members about the exchange offerings and 10 the system in choosing a plan that will best meet 11 their health needs. 12 We look forward to continuing to work with 13 Donna Frescatore and DFS as we guide members through 14 the enrollment process for 2015. 15 Thanks. 16 SENATOR SEWARD: Well, you've had a very 17 complete testimony. All my questions have been 18 answered, except, one for a -- a quick one for 19 Ms. Clarke. 20 You're absolutely right, you know, through 21 legislation, you know, the Freelance Union was given 22 another year -- the demonstration project was given 23 another year. 24 Have -- will anything change at the end of 25 2014, versus the end of 2013? 1 LACEY CLARKE: Well, it -- 2 SENATOR SEWARD: Other than the fact, you 3 know, in terms of the impact on your -- your members 4 and subscribers? 5 LACEY CLARKE: Well, we -- our members are 6 currently enrolled in our -- in FIC through the end 7 of 2014. 8 The demonstration project only lasts through 9 the end of 2014, so, right now, we're -- that's -- 10 we're really involved in trying to figure out what 11 will happen in 2015, and we're really committed to 12 making sure that we get our members onto the 13 exchange. 14 But it will definitely be a different 15 marketplace for our members in 2015. 16 SENATOR HANNON: Just a lot of work ahead. 17 LACEY CLARKE: Exactly. 18 SENATOR HANNON: Well, thank you very much. 19 SENATOR SEWARD: Thank you. 20 SENATOR HANNON: We appreciate it. 21 SENATOR SEWARD: The next panel is our 22 insurers: 23 Sean Doolan, Blue Cross/Blue Shield; 24 Paul Macielak, Health Plan Association. 25 SENATOR HANNON: Good afternoon. 1 PAUL MACIELAK, ESQ.: Good afternoon. 2 SEAN DOOLAN, ESQ.: Good afternoon, yes. 3 SENATOR HANNON: Who would like to go first? 4 SEAN DOOLAN, ESQ.: Go ahead. 5 PAUL MACIELAK, ESQ.: All right. 6 I guess, after having sat here this morning 7 and listening to a lot of the comments, I mean, 8 from, I think, our perspective on the plan 9 perspective, everybody operated under tight 10 timelines, and continue to operate under tight 11 timelines. 12 You know, plans have had a deal with major 13 and substantial policy-form changes, rate 14 applications, technical architecture to plug into 15 the exchange. And there have been bumps in the 16 road, and we've heard about some of them. 17 There's a whole other list of other bumps in 18 the road that we've already had to deal with as 19 we've proceeded. 20 One such bump has been the federal policies 21 that have changed at the last minute, that have 22 bound the state exchange, which has bound plans, in 23 terms of they're dealing with enrollments. 24 Extended times for enrollments, extended time 25 periods for payment of premiums, all of those 1 factors play into the ability of the plan to process 2 the applications, to get out the cards, the premium 3 invoices, et cetera. 4 Today, as we sit here, we meet with the 5 State, at the CEO level on policy once a month, we 6 meet on legal issues once a week, operations once a 7 week, and the technical-related issues twice a week. 8 That's an ongoing relationship that's been 9 going on. 10 In terms of, from our perspective, HPA, we've 11 always said, at the exchange, there were going to be 12 winners and losers. 13 And you heard a lot about that today, in 14 terms of, you know, how it's rolled out in the 15 marketplace. 16 Clearly, the Healthy NY population and 17 sole proprietors have taken hits, in terms of, what 18 they had, to what they have today as it's rolled 19 out. 20 The direct-pay market has had benefits in 21 terms of what their premiums were, to what they are 22 now in the exchange. 23 Affordability is and continues to be, you 24 know, the theme that we seem to strive for, we know 25 that's what the exchange staff is also looking for, 1 and we believe that's what the public is looking 2 for, in terms of health insurance. 3 Whether it's transparency; whether it's 4 trying to address surprise balanced billing, or 5 billing from providers Senator Golden referred to; 6 whether it's dealing with some of the ACA taxes or 7 HCRA taxes that we're all paying; I mean, I think 8 affordability is a key factor. 9 Now, that has to be juxtaposed, I think, with 10 the tension that exists about access and choice, and 11 we heard a lot today about out-of-network benefits. 12 So I'm fond of saying there's no free lunch, 13 and that I think is an example of something that you 14 have to confront. 15 Well, chambers, sole proprietors, Healthy NY 16 people, are concerned about affordability and want 17 the policies to be more affordable. 18 You have, on the other hand, other people who 19 want out-of-network access and choice, which are 20 going to add costs to the policy. 21 And that's something I think you need to 22 reconcile. 23 I think I'll turn it over to Sean to make 24 some more points. 25 1 SENATOR HANNON: I would simply point out, 2 the sole proprietors -- 3 (Turns on microphone.) 4 SENATOR HANNON: I would point out, the sole 5 proprietors are not saying that they got increased, 6 but, somehow, the system was able to take care of 7 them before; and now they're being declared 8 individuals instead of being able to a group of two. 9 How is it that it -- by making them 10 individuals, the insurance companies are saving and 11 the individuals are paying more? 12 SEAN DOOLAN, ESQ.: What do they mean, the 13 companies are saving? 14 PAUL MACIELAK, ESQ.: Did you say the 15 companies are saving? 16 SENATOR HANNON: Well, you're the ones who 17 just said it costs somebody if you make these 18 changes. 19 Well, you're -- if the individuals are paying 20 more, then, obviously, the insurance companies are 21 collecting more, so, they're benefiting. 22 PAUL MACIELAK, ESQ.: Well, I don't 23 necessarily see that as a benefit. 24 SENATOR HANNON: I would think -- 25 PAUL MACIELAK, ESQ.: If we have to pay -- 1 SENATOR HANNON: I was just -- 2 PAUL MACIELAK, ESQ.: -- additional taxes -- 3 SENATOR HANNON: I was just stating the 4 proposition that you had outlined. 5 PAUL MACIELAK, ESQ.: Well, if we have to pay 6 additional taxes, like the ACA taxes, that's not 7 something that's benefiting the insurance companies, 8 but that is being imposed on those sole proprietors. 9 Some of the additional benefits that are 10 mandated by the essential benefit package, that 11 sole proprietors don't like, those aren't benefiting 12 plans either. They are just additional benefits 13 that are made available to the population. 14 SENATOR HANNON: Then you'd have no problem 15 going back to allowing these husband and wives to be 16 declared a group instead of being two individuals? 17 SEAN DOOLAN, ESQ.: Yea, unfortunately, 18 that's driven by federal law. 19 PAUL MACIELAK, ESQ.: It's federal policy, 20 yeah. 21 SENATOR HANNON: I understand that. 22 SEAN DOOLAN, ESQ.: No, as a matter of fact, 23 the "sole prop" issue is probably the most 24 perplexing, because they were hit with two things: 25 Number one, they were moved from the group 1 market, or a peg off the group market, to the 2 individual market. That was driven exclusively by 3 federal rules. 4 The second issue is, their product selection, 5 many sole props were in high-deductible plans. 6 SENATOR HANNON: Excuse me? 7 SEAN DOOLAN, ESQ.: Many sole proprietors 8 were in high-deductible plans. 9 By moving them into the individual market; 10 and, in turn, as a result of the changes to -- that 11 were coming down from the federal government, those 12 high-deductible products became more expensive. 13 So, how to address it? 14 You know, quite frankly, other than getting 15 at the underlying cost-drivers to coverage overall, 16 unless you had some movement from the federal 17 government to allow them to shift back to the group 18 market, you know, there's nothing, you know, at 19 least on the surface, that can be done. 20 SENATOR HANNON: What about the fact that, 21 last year, we allowed for the continuation of the 22 professional employee organizations? 23 How do those members of those differ so much 24 from the two-member groups, in concept? 25 SEAN DOOLAN, ESQ.: To a great -- the concept 1 is the same, but the PPOs, and this is actually 2 something I think that they're still waiting for 3 federal guidance on, the change to the "association" 4 law required, if you're a small group or an 5 individual and you go into an association business, 6 you're rated -- you're going to continue to be rated 7 as a small group or as an individual. 8 The benefit of PPOs is that they could rate 9 them as a large group, even though there was no 10 connection between the individual and the small 11 group. 12 Whether the federal law -- and that -- again, 13 that change in state law to applicable associations 14 was driven from the federal government. 15 To the extent -- and I think this is, you 16 know, clarification that's still needed from the 17 federal government, to the extent that that same 18 rule applies to PPOs, then, they're going to run 19 into the exact same problem. 20 SENATOR HANNON: You wanted to start. 21 SEAN DOOLAN, ESQ.: Thank you. 22 I will just touch on a few global issues, in 23 terms of how things have gone, and then, perhaps, we 24 can jump into some of the individual questions. 25 To echo Paul, you know, this -- you could not 1 underestimate -- 2 SENATOR HANNON: What I think we failed to 3 do, this is being webcast, and we failed to have you 4 do one essential thing: Identify yourselves for the 5 people who are on the other end of the TV camera. 6 SEAN DOOLAN, ESQ.: He's Paul Macielak, 7 CEO of the Health Plan Association, chairman of the 8 board, and president. 9 I am Sean Doolan with Hinman Straub, 10 representing the Blue Cross plans of New York. 11 SENATOR HANNON: Thank you. I'm sorry. 12 SEAN DOOLAN, ESQ.: No, thank you. 13 This has been a transformational period for 14 the plans. 15 The focus today has really been on the 16 individual and small-group market vis-a-vis the 17 exchange. 18 In reality, virtually every policy, whether 19 it be coverage policy or plan policy, whether it be 20 actuarial, whether it be underwriting, or whether it 21 be sales, have gone through dramatic changes and 22 implemented in a short time period. 23 You know, as Paul had mentioned, there have 24 been challenges, certainly, not the least of which 25 has been a change in the paradigm of oversight. 1 Insurance has traditionally been a 2 state-regulated business, with the exception of 3 ERISA or self-funded plans. 4 Now, obviously, many of the rules are being 5 driven by the federal government on a blanketed 6 perspective, not taking into consideration where 7 each individual state has been in the past or what 8 their ground rules are today. 9 Adapting and changing to that has been 10 incredibly challenging, not to mention the 11 operational issues around the exchange. 12 Historically, the business of insurance is 13 really between the broker, at least with small 14 groups, the plan, and the group. 15 Inserting the exchange into that with 16 individuals is just simply enrollment from the 17 individual to the plan. 18 Inserting the exchange into that process, 19 where the exchange is the front end of enrollment 20 without the plan's ability to do enrollment 21 themselves, has been, you know, not only from an 22 IT perspective, but just operationalizing it, an 23 incredibly challenging endeavor. 24 And, you know, in terms of recommendations at 25 the end, you know, perhaps there are some areas for 1 improvement there. 2 The exchange staff, you know, certainly led 3 by Donna, the level of collaboration to all 4 stakeholders, you know, really is unprecedented, and 5 has been remarkable. 6 Paul went through, you know, the somewhat 7 daily contacts we have with them. 8 You know, certainly, we agree on issues as 9 frequently as we disagree, but, the dialogue, 10 whether it be with Donna, her staff, the DFS, and 11 other stakeholders, you know, has been, you know, 12 truly helpful in trying to facilitate this process. 13 In terms of your initial question, Senator, 14 "Has the implementation of the ACA accomplished its 15 goal?" -- and I think Paul touched on, and the 16 broker panel before touched on, the key issue of 17 affordability -- I think you have to look at the 18 shop and individual exchanges differently. 19 Certainly, the individual exchange, simply by 20 putting in more products and greater selection to 21 what was historically a broken system, is an 22 improvement. 23 You know, that said, there were a number of 24 assumptions that went into the price-setting 25 process. 1 Typically, through the prior approval, there 2 are a limited number of assumptions: utilization, 3 trend, being the two prominent ones. 4 This process was a little bit more 5 speculative, so to speak, in that, there was an 6 anticipated level of uninsured people, the young 7 invincibles, becoming enrolled. 8 Likewise, there was morbidity factors: How 9 many groups were dropping coverage, and those 10 individuals go -- healthy individuals going into the 11 exchange? 12 I think it remains to be seen whether those 13 projections will ultimately prove to be true. 14 And as a matter of fact, you know, as we head 15 into 2014 and 2015 rates, you know, we will be 16 submitting -- because of the prior approval process, 17 we will be submitting rates, you know, in the first 18 quarter, April, perhaps May at the latest, with very 19 limited experience to ascertain whether those 20 assumptions were spot on, or whether the number of 21 healthy individuals that came into the pools were 22 either overestimated or underestimated. 23 SENATOR HANNON: Given the number of types of 24 policies that have sharply decreased because of the 25 whole nature of change -- 1 SEAN DOOLAN, ESQ.: Yeah. 2 SENATOR HANNON: -- should you have to submit 3 your rates that early? 4 Or, should you at least, on a one-time basis, 5 be given greater time to get some experience, and 6 then -- because, arguably, they're -- the time frame 7 was set when there were forty, fifty thousand types 8 of policies, many of them were almost me-toos, 9 but, still, they don't have to look at all of them? 10 SEAN DOOLAN, ESQ.: Yeah, I mean, you've got 11 two timelines. 12 You've got the prior-approval timeline, you 13 know, which we've talked about, which is laborious. 14 I mean, there's a 60-day notice of proposed 15 rates, there's a review period, and then there's an 16 additional 60 days at the back end, prior to being 17 implemented. 18 You know, there's an additional time period 19 for the department to request more time. 20 You know, that alone is about 150- to 180-day 21 process. 22 Compounding things -- so that takes you, you 23 know, at a minimum, to, you know, May or June. 24 Compounding and accelerating that timeline is 25 the recertification of the plans to participate in 1 the exchange, which the department and the exchange 2 has actually given us some additional flexibility, 3 but it's still resulting in the submission of rates, 4 you know, in, you know, April or May. 5 And I think that, again, the plans submit the 6 rates, say, May 1, but they begin to develop the 7 rates on April 1, and, it gives them, essentially, 8 three months worth of experience to determine 9 whether they have a healthy pool, a sick pool, and 10 whether any of the assumptions from last year's 11 prior-approval process were accurate or not. 12 SENATOR HANNON: I'm just saying, for both of 13 those timelines, it seems to be that experience 14 would be a great valuable asset to have for 15 actuarial projections, for adequacy network 16 projections, to see what type of flexibility needs 17 to be given. And it's -- those are self-imposed 18 deadlines, both by the department and the exchange. 19 SEAN DOOLAN, ESQ.: Yeah. Yeah, I agree, 20 I agree. 21 PAUL MACIELAK, ESQ.: We -- 22 SEAN DOOLAN, ESQ.: And one other -- I'm 23 sorry, Paul. 24 One other huge variable in this, is risk 25 adjustment, which will be coming down again from the 1 federal government. 2 There were simulations done by the 3 department, that were somewhat controversial, and 4 that some plans agreed with them, some plans 5 disagreed with them. Those, likewise, were built 6 into the rate. 7 That risk-adjustment model has still yet to 8 be promulgated by -- fully promulgated by the 9 federal government. 10 So, again, another variable that could have a 11 dramatic impact on premium. 12 SENATOR HANNON: But how could they do a risk 13 adjustment until they know the actuarial makeup, the 14 demographic makeup -- 15 SEAN DOOLAN, ESQ.: Exactly. 16 SENATOR HANNON: -- of the insured pool? 17 SEAN DOOLAN, ESQ.: Exactly. 18 PAUL MACIELAK, ESQ.: Only to model. I mean, 19 it's -- what it was based on was some assumptions. 20 I mean, we've operated, to date, on a lot of 21 assumptions, and that's been part of the rate 22 setting. 23 And while you've had a number of new plans 24 enter into marketplace, you have had a few other 25 plans sit on the sidelines, because I think there 1 was a fear about rates, fear about, you know, what 2 the mix was of who was going to enroll, and what the 3 pent-up demand was, and what some the utilization 4 would be. 5 SEAN DOOLAN, ESQ.: So back to the two 6 worlds, you have the individual market, which we 7 talked about, which definitely has promising 8 features. 9 On the flip side, I think you've heard pretty 10 loud and clear, there has not been a lot for small 11 business in the ACA. 12 You have additional benefits, number one, 13 which, obviously, lead to the increased cost in 14 coverage. 15 You have a very narrow tax-credit band that 16 clearly is not providing a sufficient number -- 17 incentive for businesses to participate in the 18 exchange. 19 Likewise, that tax credit, under federal law, 20 lasts only two years. 21 And so you have -- and you have additional 22 taxes. 23 The ACA tax, the research task, that was 24 enacted last year. You know, the issue about 25 self-financing, which you talked about, or touched 1 on earlier, Senator, in terms of paying for the 2 exchange in 2015. 3 And going forward, to me, that is, you know, 4 especially since there is no mandate for the 5 small-group market, addressing the affordability of 6 small-group coverage will be critical. 7 The other issues, in terms of lessons 8 learned, you know, going forward, uhm -- and I -- 9 actually, one more other issue on the shop that 10 I think has been an impediment, that the State, 11 actually, we disagreed with them on, and the State 12 actually had flexibility in this regard: 13 One of impediments to the shop is, instead of 14 a group enrolling in the shop, or enrolling for all 15 of their employers -- employees, rather, which was 16 certainly the initial guidance from the federal 17 government -- the initial guidance from the federal 18 government is, the group could pick the metal level, 19 but each individual employee would pick the company. 20 So whether it be Empire, Aetna, Oxford, that 21 complexity, which I think recognized pretty early on 22 by the federal government, and they allowed the 23 states to simply stick with the current process, 24 which is, a group can enroll all of their members, 25 not only selecting the metal tier, but the 1 individual plan. 2 I think between the broker community and the 3 plans, that became a pretty significant impediment 4 to enrollment in the shop, which I think you do have 5 the control to modify. 6 SENATOR HANNON: State law? Federal law? 7 SEAN DOOLAN, ESQ.: State law. 8 The federal law modified it by giving states 9 flexibility to allow for group enrollment. 10 The State decided to stick with individual 11 employee selection. 12 So they're with -- they're -- and I think, 13 frankly, that would make the shop, you know, 14 perhaps, going forward, a more attractive 15 marketplace. 16 SENATOR HANNON: I think there needs to be a 17 full assessment of how corporations and small 18 corporations are going to be looking forward in 19 2015. 20 SEAN DOOLAN, ESQ.: Sure. 21 SENATOR HANNON: Because the federal 22 government suspended part of the rules for the large 23 corporations -- 24 SEAN DOOLAN, ESQ.: Right. 25 SENATOR HANNON: -- and then changed around 1 some of the rules for the small. 2 So, if there's anything with the market, 3 they've screwed it up. 4 SEAN DOOLAN, ESQ.: Right. 5 In terms of -- and this actually touches on, 6 I think, in terms of looking forward, an area to 7 improve, you know, the operations of the exchange, 8 as I said, you know, the plans have had, you know, 9 a fairly significant challenge. 10 There have been mistakes. 11 A lot of the front-end issues that Donna 12 touched on, that the State experienced in October 13 and November, both in terms of enrollment, but just 14 consumer access to the website, you know, obviously, 15 the plans to -- start to experience in December and 16 January with actual enrollment. 17 So the same high volume, not necessarily high 18 volume in enrollment, but high volume in terms of 19 questions, and in terms of customer service. 20 You know, likewise, there is somewhat of a 21 natural barrier between the actual enrollment 22 process and the plan's role. 23 The plan, under the current construct, has 24 very little role in the actual enrollment of whether 25 it be a group or an individual on the exchange. 1 That is handled exclusively by the exchange, 2 with assistance from, primarily, the navigators, but 3 also brokers. 4 To the extent that there is -- the plans can 5 play a greater role in actually facilitating 6 enrollment, either having access to the exchange's 7 web portal and enrolling people through the plan's 8 web portal, or having the ability to directly enroll 9 with the exchange. 10 SENATOR HANNON: Do you mean, letting the 11 plans who have been doing enrollment for decades 12 actually do the enrollment? 13 SEAN DOOLAN, ESQ.: Correct. 14 SENATOR HANNON: Well, it seems to me, that 15 if you're not getting a subsidy or a tax credit, or 16 you're not going on Medicaid, there's no reason to 17 have the exchange do the qualification and all that. 18 Why not just go directly to a plan? 19 SEAN DOOLAN, ESQ.: Right. 20 It -- certainly, at a minimum, having greater 21 visibility. 22 I mean, one of the challenges we had in 23 operationalizing things were, in order to get access 24 to the exchange, you had to begin the application 25 process. 1 So the plans, just validating logos, 2 validating that the information is correct, they'd 3 have to be a dummy applicant, so to speak; as 4 opposed to having greater visibility, and to the -- 5 at least on their own information, to ensure 6 accuracy. 7 Again, hindsight being 20/20, I think that's 8 something that could be looked at to be corrected, 9 going forward. 10 In terms of some of the individual issues 11 that have been raised, you know, I know, earlier on, 12 there was a question about multi-lingual 13 participation, that I think both Senator Rivera and 14 Senator Larkin raised. 15 Actually, there's an obligation on the plans, 16 to the extent that there is greater than 10 percent 17 of a particular ethnicity, whether it be 18 Spanish-speaking, whether it be Asian, whether it 19 be, even in Rockland County, Yiddish or 20 Orthodox Jewish, there is a requirement that the 21 plans provide enrollment data for -- or, enrollment 22 applications, as well as backup data, in that 23 particular language. 24 You know, likewise, a number of plans, you 25 know, certainly Empire in the city being one of the 1 more prominent, has gone through an outreach to the 2 Spanish populations in the Bronx, in Brooklyn, in 3 Queens, to facilitate and educate them on the 4 enrollment process. 5 But, certainly, more can be done, and having 6 the multi-lingual website is a big start. 7 In terms of the networks -- 8 SENATOR HANNON: My point on multi-lingual 9 was, that they have information in other languages, 10 but there's not enrollment, so that if you were to 11 go through the enrollment process, you need to know 12 English. 13 SEAN DOOLAN, ESQ.: Right. 14 No, absolutely. Absolutely. 15 In terms of networks, certainly a lot of 16 lessons to be learned. 17 There are a number of issues there. 18 You know, in terms of network submissions, 19 and that the networks that the plans used to apply 20 for the exchange, many -- each plan varied. 21 Many plans, a number of upstate plans, for 22 example, simply use their commercial network. 23 So a provider, not knowing whether they're on 24 the exchange or not on the exchange, frankly, might 25 not know, because the plan is simply using their 1 commercial network. And, the contract that they 2 have with the provider covers all products -- all 3 commercial products. 4 Some plans used a variation of their 5 commercial network. Some plans built an 6 exchange-only network. 7 Based on the contracts with providers, they 8 were to be notified of their, either, option to 9 accept new rates or new terms and conditions, or 10 not. 11 In terms of -- 12 SENATOR HANNON: Well, that sounds well 13 enough, but you were here to hear Dr. McLaughlin 14 describe, both as an individual and as a 15 practitioner, the attempt to find out who is in 16 which plan, when, and how to prove it. 17 So I would think that there's a large 18 mountain to go up right now for all the health 19 insurers in this state, because of all of the 20 changes to try -- 21 SEAN DOOLAN, ESQ.: Yeah, and my only point 22 is, I think it varied, depending on the approach 23 that the plan had taken. 24 You had also asked about network adequacy. 25 SENATOR HANNON: Well, let me go back to it. 1 This is, Dr. McLaughlin was the 2 Upper East Side. Hardly the rural part of America. 3 In fact, if I recall, it's probably one of 4 richest parts of America; and, still, she was pretty 5 articulate about the amount of confusion that 6 exists. 7 PAUL MACIELAK, ESQ.: It still goes back to 8 what Sean was saying: Depending on what model the 9 plan pursued, it didn't matter what part of the 10 state you were in. It mattered what the plan model 11 was that they pursued. 12 That created, I think, some of confusion. 13 SENATOR HANNON: I know, and the problem was 14 not the exchange. The problem is, your memberships. 15 SEAN DOOLAN, ESQ.: Yeah, I think, again, you 16 know, starting with the exchange, you know, and 17 I think that they would acknowledge this is an area 18 for improvement. 19 The consumer's ability to determine the 20 providers in each plan's network is not a single 21 provider point-and-click methodology, as opposed to 22 getting full visibility into the entire plan 23 network. 24 Likewise, from the plans' end, I think that 25 they can and should do a better job of transparency 1 on their own web pages, in terms of which plans are 2 in the network. 3 PAUL MACIELAK, ESQ.: Right, but I think that 4 was, both were a reflection of the time. 5 The time-compressed period that plans had to 6 submit their proposed networks, have DOH, DFS, do 7 the review and certify, or come back with what 8 deficiencies were to have corrected, that it was 9 that compressed. 10 I think that, in part, feeds to some of the 11 confusion we're hearing about today. 12 SENATOR HANNON: I think there was a lot more 13 need for the plans, and, in fact, probably the 14 exchange, to allow people to put in their providers 15 and find out if anybody meets them. 16 Likewise for drugs, likewise for clinics, 17 likewise for hospitals. 18 It is -- the entire onus is on an incredible 19 maze of the consumer, or potential consumer, to try 20 to figure out who's where. 21 But I would simply -- I would simply think, 22 go back and listen to what Dr. McLaughlin said. 23 That's -- it's a lot more complicated than it's ever 24 been before. 25 SEAN DOOLAN, ESQ.: Yeah, and I think to 1 Paul's point, I mean, both, in the defense of the 2 exchange operationalizing their platform and the 3 plans developing those networks in a short 4 time frame, and negotiating contracts in a short 5 time frame, continues to be a work in progress. 6 SENATOR HANNON: This goes back to your other 7 point: I think there's more time needed to plan for 8 next year. 9 SEAN DOOLAN, ESQ.: Correct. 10 In terms of the network adequacy review, 11 I think you had mentioned, DFS versus DOH. 12 In reality, today, the DOH process is far 13 more robust and comprehensive. 14 The DFS process, really, is limited to a 15 fairly minimalist approach. 16 And I think deferring it to DOH, and the 17 DOH review process, while more cumbersome, and has 18 actually been -- there's been a quite a bit of 19 give-and-take between the plans. 20 And DOH, from a consumer's perspective, in 21 terms of determining network adequacy, was the 22 appropriate approach. 23 SENATOR HANNON: Well, that may be true, but 24 the point is, for the consumer in New York, you have 25 a problem with adequacy of a network, you make your 1 complaint to the Department of Financial Services. 2 What the Department of Health is doing, is 3 simply regulating the HMOs that are Medicaid 4 HMOs, and, that's a whole different process. 5 SEAN DOOLAN, ESQ.: Actually, DOH determines 6 network adequacy for commercial HMOs as well. 7 So, they basically took that commercial HMO 8 network-adequacy standards and imposed them on 9 insurance products. 10 So, again, it actually required the plans, on 11 their insurance products that had closed networks, 12 to raise the bar. 13 In terms of other changes that were made, 14 again, going from HMO, to insurance, and I think 15 Donna had touched on this, there were a number of 16 consumer protections that exist in the HMO market, 17 that, as a result of the contracting with plans, 18 have been extended to the insurance market; whether 19 it be allowing a member to go out-of-network for 20 emergency services. Or, for that matter, an APO 21 product, allowing a member to go out-of-network, to 22 the extent that there is not an appropriate and 23 available provider in-network to provide those 24 services. 25 So, incrementally, I think they tried to 1 raise the standards. 2 Clearly, more needs to be done, especially in 3 terms of, you know, participating providers and 4 network adequacy. 5 And, whether it's updating them on a more 6 timely basis, whether it's greater transparency, you 7 know, the key, I think, from a policymaker's 8 perspective -- 9 SENATOR HANNON: All of which is obviated by 10 the fact, if they've made these skinny networks, 11 that -- and don't allow for going outside of 12 network, that it doesn't matter about the rules for 13 out-of-network, and, that the "adequacy" has had a 14 new definition. 15 SEAN DOOLAN, ESQ.: Yeah, and I was going to 16 get to the out-of-network issue, so, just to segue 17 there, you know, because, obviously, that's been a 18 dominant theme here. 19 Even prior to the implementation of the ACA, 20 the marketplace has been moving away from 21 out-of-network coverage, for two reasons: 22 You know, number one, pure affordability. 23 And, having out-of-network benefits 24 regardless of which benchmark you were using, 25 whether it's UCR, a percentage of Medicare, or a 1 plan's own fee schedule, was becoming 2 cost-prohibitive. And the pricing, and you see it 3 in the large-group market as well, the pricing was 4 really being skewed, because only those groups or 5 individuals that were accessing, or needed to have 6 out-of-network providers, were purchasing the 7 coverage; thereby, driving up the price. 8 The other issue, you know, which, frankly, 9 I think Senator Martins talked on, and, actually, 10 Dr. McLaughlin referenced, was the 11 balanced-billing process; where, if you're 12 in-network, you have a contract between the plan and 13 the physician or the hospital, that is payment full. 14 If you're out-of-network, the plan pays their 15 out-of-network reimbursement rate. Since there is 16 no contract, the provider then turns around and 17 balance-bills the member whatever that particular 18 provider desires. 19 Now, Dr. McLaughlin said that that, 20 frankly, was, you know, an admirable process: let 21 the provider negotiate with the consumer. 22 Frankly, from a customer-service perspective 23 and a public-policy perspective, I would think you'd 24 want the member out of the middle, and not to get 25 hit with that surprise bill. 1 You know, likewise, the example that 2 Senator Golden walked through, unfortunately, that 3 is a very common scenario, where you have the member 4 go to a participating hospital, they think they're 5 in-network. The surgeon is a participating 6 provider, but the anesthesiologist or some other 7 specialist is non-par; the hidden provider. 8 They think that they've played by the rules, 9 and they get hit with the balance bill. 10 Greater transparency in terms of the 11 physician, because they'll -- should know, you know, 12 who's providing the services. The hospital should 13 know which -- whether they're par or not, which 14 plans they participate with. 15 Greater access to consumers of which 16 providers are par, and which are -- which plans they 17 participate with and which they don't, is a major 18 step in the right direction, in terms of reform, 19 that would go a long way. 20 You know, in terms of, you know, the mandate 21 of having an out-of-network benefit, again, you 22 know, with the digestion of these benefits today, 23 and, likewise, even if you handled it through a 24 rider type of scenario, the groups that would 25 purchase that rider are only those groups that would 1 utilize the coverage; and that, in turn, would make 2 it cost-prohibitive. 3 So, from the plan's perspective, having a 4 mandate, whether it be on the exchange or off the 5 exchange, of an out-of-network benefit, which 6 doesn't hold the consumer harmless, number one; 7 which doesn't have that greater transparency and 8 ultimately leads to increased costs; goes completely 9 contrary to the goals that we're trying to 10 accomplish in terms of affordability. 11 SENATOR HANNON: Doesn't answer the question. 12 The -- I did put a bill in, for requiring an 13 out-of-network rider, but without any limitation as 14 costs. 15 So if people really want that, is what they 16 want to design their policy, let them pay for it. 17 PAUL MACIELAK, ESQ.: Well, the other related 18 issue to that is, that rider we have to get approved 19 by the DFS division. And I'm not sure that, you 20 know, what would be requested, what we believe would 21 be the market price, would get clearance through the 22 DFS process, in terms of the prior approval. 23 So that would be a concern, as we had seen, 24 actually, in the other direct-pay market, 25 particularly on the point-of-service product, what 1 some of the costs were, what some of the rate 2 requests were, versus, what was approved. 3 So, that, that would be a concern. 4 SENATOR HANNON: Good point. 5 SENATOR SEWARD: I had one question. 6 And it's been an interesting discussion here. 7 You've covered a lot of issues. 8 But I had one question regarding the -- your 9 view of the transfer of debt and information once, 10 you know, someone has enrolled on the exchange and 11 selected a plan, that the delay in getting the 12 verification and the cards and ID numbers out, you 13 know, we've run into many, many examples of where 14 that has been a great delay. 15 And, of course, the premium payment also. 16 How -- how prompt has the State been in terms 17 of providing the plans with information, in terms of 18 who has enrolled in their plans; and, thus, you 19 start the process for billing and setting up the 20 account? 21 SEAN DOOLAN, ESQ.: Yeah, I mean, I would say 22 in a condensed time period, you know, they have done 23 a good job. 24 Part of the issue was, you know, each plan 25 needed to go through a testing process, an IT 1 testing process, to make sure that the enrollment 2 fields and the actual enrollment, on what they call 3 the "834 form," matches up with the plan's process. 4 They went through that process and 5 standardizing it all amongst all of the plans. 6 That, obviously, was in a very short time 7 period. 8 The transfer of the files began, you know, 9 roughly, in December. It went through December. 10 So, in a very tight time frame, sure, they 11 met all their milestones, but then it made it very 12 difficult for the plans to turn around and meet 13 their milestones. 14 And, you know, that being said, the plans 15 have had challenges. 16 You know, the way the process is unfolding, 17 is that the plan gets the enrollment, they confirm 18 enrollment, and then they send out a bill. 19 They send out a bill, they get premium 20 payment back. The member, at that point, is 21 technically enrolled, but doesn't have an ID card. 22 You know, typically, this happens in, you 23 know, November -- October, November, and December, 24 so by the time January 1 rolls around, they've got 25 the card in hand. 1 Here, we're trying to do everything almost 2 simultaneously. 3 To adjust to that and address that issue, the 4 plans have done a couple of different things. 5 Number one, given consumers the ability to 6 download a temporary ID card off the web; 7 And, number two, give providers -- and this 8 actually came up on the provider panel, give 9 providers access to their provider web portal with 10 the plan, to determine whether an individual is 11 enrolled or not. 12 That's the concept. 13 Obviously, there are a lot of challenges. 14 You know, when you have thousands of people 15 trying to download temporary ID cards, you run into 16 bumps. 17 I think the fact that all the invoices, to 18 Donna's point, have gone out by the end of last 19 week, the process should start to improve. 20 We still have challenges ahead, though. 21 PAUL MACIELAK, ESQ.: And I would just echo 22 what John said, but I think the data flow from the 23 State to the plans, really, was as good as they 24 could do, in terms of the bulk of it. 25 As we went through the process, and we would 1 see in our weekly calls, we would see glitches, and 2 you would see, you know, a field that wasn't 3 identified, or a particular family status that would 4 have knocked somebody out of coverage, so the 834 5 wouldn't have been complete or would have been 6 rejected. 7 Those type of things came up, and we continue 8 to work through those kind of bumps. 9 SEAN DOOLAN, ESQ.: Yeah, and, obviously, as 10 the federal rules changed, you know, in December, 11 you know, that threw an additional monkey wrench in 12 resources. 13 And the perfect example, is this ability to 14 purchase catastrophic coverage -- 15 PAUL MACIELAK, ESQ.: Right. 16 SEAN DOOLAN, ESQ.: -- you know, which came 17 down from the federal government. 18 The only catastrophic policy available is on 19 exchange. 20 And as I mentioned earlier, since the plans 21 have no ability to enroll, they pointed to the 22 exchange to facilitate enrollment. 23 While the exchange needed to verify whether 24 the individual was getting a federal waiver, and got 25 it punted back to the plans, and then the plans, 1 ultimately, are now, at least in this limited 2 circumstance, are allowed the ability to enroll 3 based on this. 4 But this all went down, you know, the last 5 ten days of the year. And, to operationalize it 6 was, obviously, challenging. 7 SENATOR HANNON: Yeah. 8 SENATOR SEWARD: Thank you. 9 SENATOR HANNON: Thank you very much. 10 SENATOR SEWARD: Our final panel, on public 11 health advocates and insurers: 12 Elisabeth Benjamin, who's the vice president 13 of health initiatives at Community Service Society 14 of New York; 15 James Lytle, Coalition of the New York State 16 Public Health Plans; 17 And, Mark Scherzer, health plan -- excuse me, 18 Health Care for All New York/New Yorkers for 19 Accessible Health Coverage. 20 We're going to ask Jim Lytle to go first. 21 JAMES LYTLE, ESQ.: All right. 22 Well -- and I will be very brief. 23 I think my client sort of bridges the 24 two last panels. They are the Coalition of 25 New York State Public Health Plans, which are the 1 Medicaid mainstream plans in the state, 2 not-for-profit provider-sponsored plans, responsible 3 for enrolling 2.7 million people in the Medicaid 4 program. 5 Four of the plans in our coalition made the 6 decision to become active participants on the 7 exchange, which we felt was extremely important, 8 particularly for those individuals who may be 9 transitioning, from time to time, from Medicaid to 10 commercial insurance. And these four plans are now 11 part of the exchange, including some of the plans 12 that have been referenced earlier today: Fidelis, 13 Health First, and others. 14 The -- how successful they've been on the 15 exchange remains to be seen. 16 Today's "Crain's Health Pulse" has more data 17 than I've seen, but, Metro Plus, the city health and 18 hospitals corporation plan reports about 19 23,000 individuals have enrolled in their plan 20 through the exchange. 21 There are -- many of the issues that the 22 insurers just discussed are shared by the plans that 23 we represent. 24 It was, I suppose, in some ways, an even 25 greater challenge for some of the plans in our 1 coalition, because this was the first time they ever 2 had to submit premium proposals, and go through this 3 sort of more commercial side of selling insurance 4 than they had previously done in providing Medicaid 5 managed care, Family Health Plus, and children -- 6 Child Health Plus insurance. 7 One of the things that the plans are 8 particularly proud of is their experience in 9 facilitating enrollment, in helping folks navigate 10 their way into health insurance, which they've done 11 for decades, or almost decades. 12 And, on the Medicaid side, they're pleased 13 that the State continues to believe in the 14 facilitated enrollment program, and the plans have 15 used their resources and their experience, 16 particularly in reaching out to populations that 17 are -- have been more vulnerable and less capable of 18 accessing health care, to try to make sure that, 19 whether it's language barriers or other barriers, 20 that information was provided as much as possible. 21 I would note, in comments of one of the 22 individuals from a small business who was worried 23 about their Fidelis coverage of one of their 24 employees, I think there's a presumption that the -- 25 those plans that have historically provided Medicaid 1 coverage are -- present networks or present an array 2 of services to the people who are enrolled in their 3 plans, that are somehow less than what they may find 4 in the commercial market. 5 They're subject to the same tests, subject to 6 the same assessments, by the Department of Health, 7 as Sean was just testifying. 8 And, I think that sort of a best-kept secret 9 in New York is going to be how robust some of these 10 Medicaid managed-care plans, or historic 11 Medicaid-plans networks, actually are. 12 We appreciate there are issues about 13 out-of-network coverage. 14 I know that the Senator has scheduled another 15 hearing on that subject. 16 I think, in general, we think it's a little 17 too soon to tell exactly how significant those 18 barriers may be, but, it is something, particularly 19 the provider-sponsored plans are sensitive to and 20 are interested in exploring further with you. 21 We -- one of the points that you made on the 22 hearing announcement was the importance of access to 23 primary care, and whether we have a primary-care 24 infrastructure robust enough to meet the needs of 25 the exchange. 1 We pride ourselves, the plans do, on their 2 ability to build strong primary care networks, 3 relying on the historic primary-care infrastructure 4 of the state, many of whom were founded by community 5 health centers. 6 And -- but, we continue to work with the 7 State on issues like patient-centered medical homes 8 and health homes, to build an even stronger 9 primary-care infrastructure. 10 And with that I'll let the -- my consumer 11 colleagues take it from there. 12 SENATOR HANNON: You talked so slow. 13 JAMES LYTLE, ESQ.: I'm sorry? I talk so 14 slow? 15 I was trying to see if I could actually be 16 briefer than Mr. Doolan, so, I was doing my best. 17 SENATOR HANNON: Now, now for a real 18 slow-talker. 19 Ms. Benjamin. 20 ELISABETH BENJAMIN: Sure. 21 First of all, I want to thank you both very 22 much for letting me come and testify -- or, inviting 23 me to testify today. 24 Thank you, Senator Seward. 25 Thank you, Senator Hannon. 1 I also really want to thank the staff of the 2 exchange, and, actually, the larger health-delivery 3 community. 4 I think the plans, the providers, the docs, 5 we've all -- the consumers, we've all really tried 6 to pull together and make this process, this very, 7 very significant transition, work as best as 8 possible for the consumers, and the State of 9 New York, along with elected officials. 10 And, it's been a really exciting, and 11 sometimes crazy-making period, but, it's been 12 really, you know, a real honor to be part of this 13 whole process. 14 And I think it's a real testament to how hard 15 we all are trying to work and communicate with each 16 other, that it has gone as smoothly for New York. 17 I think probably smoother in New York than 18 anywhere else in the country. 19 And, you know, there's a lot of great people 20 all really trying to pull together. 21 SENATOR HANNON: As incredible as it seems, 22 I read this morning, that there is one exchange, 23 maybe there's more, in the nation that's not even 24 open yet. 25 ELISABETH BENJAMIN: Yeah. Vermont is not 1 doing well, as I understand it from my colleagues 2 there. 3 You know, Oregon is still having a tough 4 time. 5 It's really troublesome. 6 But, New York is not -- I mean, really, 7 New York has an exemplary exchange. And, especially 8 because we do this one-stop shopping that I think 9 Donna was trying to talk about. 10 You know, we really are trying to do small 11 group, and public insurance, and the qualified 12 health plans, all in one house. 13 And from the consumers' perspective, that's 14 incredibly helpful, because we do have consumers 15 that are trying to sort through which bucket they 16 should be following -- falling in, and our exchange 17 actually does make it very easy to figure that out. 18 But, I'll just try to be brief. 19 You know, Community Services Society, one of 20 these old philanthropies, has been around for many, 21 many years. 170 years in New York. 22 We both do -- we have the largest state 23 navigator program. We're in 61 out of 62 counties 24 through our network of 38 community-based 25 organizations and chambers of commerce and 1 business-serving groups. 2 It's a robust network, we're really proud of 3 it. 4 We also -- so that's for our enrollment 5 services, but we also work to help people, 6 post eligibility, post enrollment, through the state 7 Consumer Assistance Program, our community 8 health-advocates program, try to navigate when 9 glitches do arrive, after having been enrolled in 10 coverage. 11 So, I'd like to talk about both of those 12 programs, super briefly, because I know you guys, I 13 can't believe you're still sitting there, 14 Senator Seward. 15 My hat's off to you. 16 But, anyway, so, I'll go fast. 17 I noticed there were some questions in the 18 hearing about: "What are navigators?" And, "How is 19 it working?" 20 Navigators, under the Affordable Care Act, 21 are designed to sort of be distinct from brokers in 22 the sense that, we're neutral. We do not receive 23 commissions from carriers. 24 I would say that's our biggest distinction. 25 We are supposed to be culturally competent. 1 We're supposed to have many multi-lingual capacity. 2 I think the idea was, that we would really be 3 sort of local trusted groups. 4 And I think, in New York, we've really 5 achieved that. There are 48 lead navigator 6 agencies. 7 So, like me, I have 47 lead agencies that are 8 companions. 9 Under my network, I have another 38 chambers 10 and community-based groups. 11 So, we really do try to be in all communities 12 in the state of New York. 13 And, I'm pleased to report, and maybe Donna 14 touched upon this, there are at least two navigator 15 groups in every single county of New York State, 16 with 572 full-time equivalent-trained navigators. 17 We've all gone through three-day intensive 18 trainings. We're pretty -- you know, on a variety 19 of topics. 20 You know, privacy is security. I think 21 you've touched about that, is a very important part 22 of our training. 23 In order to -- I mean, I can talk about all 24 the protections in the exchange itself, to make sure 25 that our -- you know, anything we have access to is 1 kept very secure. 2 And, I can get into that if you want to. 3 The navigators are really helpful in rural 4 communities where, you know, you only have dial-up. 5 A navigator group can come in and really help people 6 that are in rural areas. 7 A lot of us are former facilitated enrollers. 8 We're really, really comfortable at working people 9 through eligibility systems. 10 And, you know, I can go through our 11 activities, but I'm going to try to be short because 12 I'm cognizant of time. 13 I think the importance of navigators is not 14 to be underestimated in the wake of a recent 15 "Health Affairs" article that came out two weeks -- 16 about a month ago, but it's in this month's 17 "Health Affairs" article, that says, 60 percent of 18 Americans do not understand basic insurance 19 concepts. 20 We're talking about deductibles, 21 co-insurance, co-payments. 22 And navigators really are there to help 23 people understand: 24 What's in the net -- what's a net -- 25 in-network? 1 What's out-of-network? 2 You know, what's in a formulary? 3 How do co-payments work? 4 What are these tiers? 5 Cost-sharings: How a cost-sharing reduction 6 can actually be sort of like a -- I like to think of 7 it as an upgrade. An airline upgrade. 8 So, kind of walking through these concepts 9 with people. 10 And, you know, after we help enroll people, 11 they're incredibly and intensely gratified. 12 We had one woman say, you know: Health 13 care's what I wanted for coverage, and I have it. 14 And, I have so many stories of people that 15 have -- we have helped enroll in coverage, that are 16 so very, very pleased to have it, and really feel 17 like the New York State of Health has offered them 18 an extraordinary option. 19 I think, just turning -- pivoting for a 20 second, the Community Service Society, along with 21 our partners at the Medicare Rights Center, 22 Empire Justice Center, and the Legal Aid Society, 23 have administered, traditionally, the state 24 Consumer Assistance Program for the last 25 three years, under Section 1002 of the Affordable 1 Care Act. 2 Thank you very much, in the past, you all 3 have helped us secure dry appropriations, so that 4 when federal consumer-assistance program funding has 5 come through, we've been able to access that. 6 And, I would just encourage you all to 7 continue to find a sustainable source of funding for 8 that program. 9 We are experiencing boomerang clients; 10 clients who, after enrollment, come back and have 11 questions, and need help kind of getting through 12 their new systems of care. 13 It is a new system. 14 People need help getting through it. 15 They need help with prior approval, they 16 need -- or, prior authorization. 17 They need help with, you know, random bills. 18 They need help, you know, as they sort of get 19 used to coverage. 20 And, I would really encourage you all to 21 continue your support in the past for that program. 22 It's an exciting program. 23 At its height, we were able to serve 24 65,000 consumers a year. 25 I know, for the help line, we run the 1 help-line component of that Consumer Assistance 2 Program, and our call volume has gone up, from 3 around 125 calls a week, to over 600 calls a week, 4 and we are struggling, with a cobbling together, you 5 know, attorneys, paralegals, and a lot of volunteers 6 that we train to handle that call volume. 7 So, your continued support would be 8 incredibly, you know, well received from our end. 9 I can answer more questions if you want, but 10 I was trying to be brief, because I know you guys 11 have been here for a while. 12 SENATOR HANNON: Earlier today, 13 Senator Larkin was talking about finding out the 14 navigator in his -- one of his counties. 15 ELISABETH BENJAMIN: Uh-huh. 16 SENATOR HANNON: So I just, while you were 17 talking, and I didn't have much time, because you 18 talked fast -- 19 ELISABETH BENJAMIN: I'm sorry. 20 SENATOR HANNON: -- I went to the state 21 health site, and looked -- I started to look for 22 navigators, and to see if I could find out a 23 navigator in my home county. 24 ELISABETH BENJAMIN: Nassau. 25 SENATOR HANNON: I couldn't find it. 1 I did find out there's an application process 2 to become a navigator. 3 ELISABETH BENJAMIN: You mean on the state 4 website? I'm surprised. 5 SENATOR HANNON: I'm on the state website. 6 ELISABETH BENJAMIN: Oh, well, I mean, I know 7 that -- 8 SENATOR HANNON: Then I went to the "Search," 9 and I went to search for "navigators," I came back 10 to what I already had. 11 Then I went to the "Search," "Nassau County 12 Navigators" and it just stopped. 13 So, the point is, I'm Joe Jones. I'm in the 14 county of Suffolk. I'm interested. I can't figure 15 it out. So, where do I go to find a navigator, and 16 how do I access the list of navigators? 17 ELISABETH BENJAMIN: Sure. 18 You go onto website, you're there now, it 19 says "Get Help." There's a "Get Help" button. 20 And then you can -- you'll be able to get -- 21 you type in, there's a "search" function, by county. 22 I've done it a lot, 'cause I, you know, have 23 to help clients select myself, actually, as a 24 navigator. 25 I personally have done over 65 enrollments in 1 the last, 2, 2 1/2 months. And, it's been really 2 fun to kind of do the process with people. 3 And exciting, actually. 4 I mean, to be able to get people coverage has 5 been sort of the -- 6 SENATOR SEWARD: You mean, after the hearing, 7 you'll be able to help -- 8 ELISABETH BENJAMIN: Yeah, I'll do it. 9 I mean, it's really -- you can appoint me, 10 Kemp. I can be your navigator. 11 [Laughter.] 12 ELISABETH BENJAMIN: But it is doable. 13 And then, also, as you're going there through 14 the application, you can stop, on the left-hand 15 side, it says "Get a Navigator," and you can go that 16 way, too, if you're doing -- 17 I mean, I wish I had -- I can show you on my 18 iPad, afterwards. 19 Kemp? 20 Senator Hannon? 21 We've lost him. 22 SENATOR HANNON: So, three times I've put in 23 the search for "navigator." The first two -- 24 ELISABETH BENJAMIN: Not the "Search" 25 function. 1 It says -- when you're on the home page, it 2 says "Get Help." 3 Do you see that? 4 SENATOR HANNON: No, it's -- yeah, but 5 there's a "Search" function. 6 What would do you -- what would you do with a 7 "Search" function, ignore it? 8 ELISABETH BENJAMIN: Well, I think -- 9 SENATOR HANNON: So I push -- the third time 10 I pushed "navigator," I got, it does show you, 11 someplace, there's site locations for New York State 12 Health, and it also got me to the DEC navigator. 13 ELISABETH BENJAMIN: Okay, no, no. 14 SENATOR HANNON: And it got me to the 15 New York City Department of Health and Mental 16 Hygiene. 17 ELISABETH BENJAMIN: But you're in the -- can 18 you just go back to the home page? 19 If you go to the home page, and it says, 20 "Individuals and Families," you click on that, and 21 then it says "Get Help." 22 SENATOR HANNON: I do websites a lot. 23 ELISABETH BENJAMIN: Okay. 24 SENATOR HANNON: I buy a lot of things. 25 ELISABETH BENJAMIN: Uh-huh. 1 SENATOR HANNON: It's not a great website. 2 ELISABETH BENJAMIN: You know, I would 3 disagree. 4 I mean, because, I think -- 5 SENATOR HANNON: The point is, there's no 6 list. 7 Why can't there be a list of navigator, by 8 county? 9 ELISABETH BENJAMIN: I think there is a list 10 of navigator, by county, but I will show it to you. 11 It's hard to describe without knowing exactly 12 where you are. 13 But, if you go under "Individual" -- on the 14 home page, you go to "Individuals and Families," it 15 says "Get Help." There's a little blue box in the 16 middle of the page. It's pretty prominent. 17 SENATOR HANNON: You know, I saw it before, 18 but why would you have "Search," and then 19 "Get Help"? 20 ELISABETH BENJAMIN: I mean, I think -- well, 21 you know, I don't design websites, so... 22 I would suggest that you talk to the exchange 23 about -- 24 SENATOR HANNON: And under "Get Help," it 25 says "Site Locations"; but why have "Search"? 1 ELISABETH BENJAMIN: I'm sorry? 2 SENATOR HANNON: It says -- yes, I can see 3 now that it came up "Navigator Site Locations." 4 ELISABETH BENJAMIN: So you got it? 5 SENATOR HANNON: And then you gotta go to 6 another page to find out lists. 7 It's still clunky. 8 ELISABETH BENJAMIN: Yeah. 9 SENATOR HANNON: It's still clunky. 10 You know? 11 ELISABETH BENJAMIN: I mean, I think 12 everybody was working really fast to get it up, and 13 it's -- you know, it's a lot to do on a little time. 14 SENATOR HANNON: All right. 15 SENATOR SEWARD: Mark? 16 MARK SCHERZER, ESQ.: Thank you, 17 Senator Hannon and Senator Seward for the 18 invitation. 19 I'm not going spend your precious time 20 echoing everything Elisabeth said, except to say, 21 I echo everything Elisabeth said about how 22 wonderfully the exchange staff had performed, and 23 the other regulatory agencies, and the stakeholders, 24 working together to make this work. 25 I'm talking on behalf of Health Care for All 1 New York, which is a -- represents over 2 160 organizations. 3 We're dedicated to winning quality, 4 affordable health coverage for all in New York, and 5 we've been very anxious to see the ACA 6 implementation work smoothly. 7 We talked about affordability earlier. 8 We're completely convinced that, certainly, 9 was -- within the design of the ACA, that those who 10 would be most helped with affordability are at the 11 lowest end, above Medicaid, on the income scale. 12 And we know they've been the ones who are -- been 13 most likely to be uninsured, because of cost 14 considerations. 15 They're the ones who are certainly going to 16 see a lot of benefit. 17 We have talked a lot today about the, maybe, 18 decreased premiums but increased cost-sharing, and, 19 whether that really is an improvement in 20 affordability. 21 I think one thing we haven't focus on at all, 22 and we ought to acknowledge, is that the ACA builds 23 in an out-of-pocket maximum into all policies, that 24 includes your co-payments, something that never 25 really existed before. 1 So, someone who's a big user of health care, 2 every time they went to the specialist it would be a 3 $50 co-pay, $50 co-pay, $50 co-pay. Even if you 4 went every day, it never stopped. 5 That -- now it stops. Now there is an 6 out-of-pocket maximum, which protects people at the 7 back end who face serious health conditions. 8 That's an element of affordability that is a 9 tremendous improvement, from the standpoint of 10 people who face big medical bills. 11 I'm -- I heard, with great interest, the 12 person from Kwik-Kut Manufacturing earlier, though, 13 who talked about how she was very concerned, that if 14 she had bought a tax-credit policy as a group, that 15 her employees still could not afford their 16 50 percent of even a small premium at the level of 17 people who are earning sixteen, seventeen thousand 18 dollars a year. 19 She's similarly concerned about them going 20 into the exchange, because, can they afford a 21 $100-a-month premium that they'll be asked to pay, 22 along -- you know, that they haven't been asked to 23 pay in the past? 24 And we recognize, fully, that that's a 25 significant issue of affordability for people in 1 that income bracket. 2 We think the State does have an excellent 3 remedy for the affordability in that -- from that 4 perspective; and that is to enact the basic health 5 plan, which we urge you strongly to consider, which 6 would enable coverage for people between 138 and 7 200 percent of poverty level. 8 It would, actually, likely save the State 9 money because it would bring in federal funds for 10 certain classes of immigrants that the State has 11 been paying for, of a State-only money, to date. 12 And, it would put people in the -- in that 13 income bracket, that -- those Kwik-Kut employees, in 14 a no-premium and very low co-payment situation. 15 That's a way to address affordability that's 16 well within your discretion to do, and we strongly 17 urge your consideration for doing it. 18 We think there -- we've heard a lot about 19 transitional enrollment problems that need to be 20 addressed, today. 21 And, Senator Hannon, I think you pointed out 22 earlier, a lot of those are not really problems of 23 the exchange, or state officials. They're problems 24 at the plans. 25 And we think that there are -- you know, we 1 could talk a lot about specific remedies for 2 different things, like billing, and whatever, but we 3 strongly suggest that plans be required to set up 4 some point people who have to respond immediately to 5 these consumer problems of, say, identifying whether 6 you're in the plan or not, immediately. 7 We also would like to see a remediation 8 program enacted. 9 So, for people who have received misadvice, 10 very often, insurance-company employees, about what 11 they have the right to enroll in and what they don't 12 have the right to enroll in, if they can show that 13 they're in the -- ended up in the wrong place 14 because of that misadvice, there's some retroactive 15 correction system in place for them to take 16 advantage of. 17 I've -- I'll rely on my written testimony for 18 the rest of what I had to say, except for going into 19 some detail on the two topics that have most 20 consumed us this morning: Sole proprietor -- the 21 sole-proprietor coverage, and the issue, 22 out-of-network coverage, which are closely 23 interrelated. 24 I think I come at this from a slightly 25 different perspective regarding the sole 1 proprietors, because we've heard a lot to suggest 2 that there's something unfair about treating 3 sole proprietors as individuals rather than as 4 businesses. 5 And while there be issues about the 6 two-person firm, that happen to be married to one 7 another, not qualifying as a small group, it's 8 really hard for me to see why it's unfair for an 9 individual who happens to have a business, being 10 treated very differently from an individual who, for 11 example, may once have had a business, but has 12 become disabled by illness and no longer can operate 13 that business. 14 Why is it unfair to put those together as 15 individuals in a market, and not -- not -- and treat 16 them differently from small groups, if you have 17 those two categories of coverage? 18 And, I'm going to come back to that, "if you 19 have those two categories of coverage," because 20 I think it's important -- 21 SENATOR HANNON: There's -- because the 22 answer is -- "Why?" -- is because we, earlier this 23 year, ratified the PEOs, which allow individuals 24 to join these organizations. 25 And, conceptually, I don't know the 1 difference between individuals in those 2 organizations, and the individuals who were part of 3 the two-person group. 4 MARK SCHERZER, ESQ.: Well, and I think -- 5 but you -- Senator Hannon, I think the question is: 6 Why are any of these individuals different from any 7 other individuals? 8 I think you could view our traditional 9 approach to the sole-proprietor coverage as having 10 provided artificial price protection to 11 sole proprietors who were pegged at 15 percent above 12 the group rate, no matter what the sole proprietor 13 experience was. 14 SENATOR HANNON: And that gets you into the 15 philosophy of, why does anybody get anything less 16 than total equality? 17 But -- 18 MARK SCHERZER, ESQ.: Well, and that's the -- 19 I think that's exciting [unintelligible] -- 20 SENATOR HANNON: -- [unintelligible] that 21 people with risky behaviors should not be getting 22 away with the same time type of premium that people 23 who lead exemplary, healthy lives. 24 MARK SCHERZER, ESQ.: But -- well, we're not 25 necessarily talking about whether people who have 1 cancer, or whatever, have led risky lives. 2 Sometimes it's just the luck of the draw 3 whether you get ill or not. 4 SENATOR HANNON: I'm not going to name them, 5 but, those -- that's an illness. 6 There are people who have risky behaviors who 7 endanger themselves; and, therefore, greater medical 8 costs. 9 And, should everybody else be subsiding them? 10 MARK SCHERZER, ESQ.: Okay, well, I -- 11 let's -- I think that's a big philosophical 12 question. 13 I'd like to look at a practical solution to 14 the problem of sole proprietors, which is within our 15 grasp. 16 I would disagree with Dan Colacino who said 17 earlier that you could roll back the practice in 18 New York to define "sole proprietors" as businesses 19 rather than individuals. 20 I think the ACA dictates they must be viewed 21 as individuals. 22 But I think what we can do is -- 23 SENATOR HANNON: There are ways that you can 24 do it. 25 I mean, we were -- we looked at the 1 freelancers, and thought that that was unfair to 2 pull the rug out from under that group. 3 So, yet, we allowed the others to have rug 4 pulled out from under that group. 5 MARK SCHERZER, ESQ.: I -- we have two -- 6 SENATOR HANNON: So the point is, how do you 7 go forward and try to find things for people? 8 And then there's the other part of it is: 9 Will the people who want to pay, now that they're 10 single, find something they -- that's worthwhile of 11 their purchase? 12 MARK SCHERZER, ESQ.: And I think we need to 13 talk about both of those issues, as opposed to price 14 and the out-of-network access. And they're both 15 solvable, we believe. 16 The "price issue," the fair way to resolve 17 it, we believe, and which something we've advocated 18 for for several years now, is merging the individual 19 and small-group markets, which the ACA permits 20 states to do. That's absolutely within your purview 21 to do. 22 And, it's something that Massachusetts did as 23 part of its reform. For risk purposes, it has 24 merged the two markets. 25 That way, is it a question of: Whether 1 you're a two-person firm or a one-person firm? Is 2 it, whether you're a firm or not a firm? 3 It all becomes irrelevant. Everyone is in 4 the same risk pool. 5 Merging the markets is, we think, the 6 solution to fairness in pricing without ping-ponging 7 the sole proprietors back and forth between the 8 high-cost individual market and the low-cost group 9 market. 10 That seems to me to be somewhat intuitive, 11 that we can average them out, by -- and not have any 12 questions of what's fair and what's not, by just 13 saying everyone's in the same pool. 14 With respect to out-of-network coverage, 15 first of all, I think we should recognize that there 16 is nothing in the ACA that dictated that New York 17 had to abolish its requirement that plans offer 18 out-of-network coverage to individuals. 19 One of the great advantages of having 20 colleges with winter break, is that I've had a 21 wonderful intern with me for the last week and a 22 half, Alec Tevevo [ph.] from Haverford College, who 23 I tasked with surveying the other states and what's 24 available in the individual markets. 25 And a copy of his report is annexed to my 1 testimony here. 2 He found with relative ease, that individual 3 coverage with out-of-network benefits is relatively 4 available in 47 states and the District of Columbia. 5 It's only New York, New Hampshire, and, we 6 think Massachusetts, although we're not sure, that 7 don't have that available to individuals. 8 So, there is nothing in the ACA that says 9 that you can't have out-of-network coverage in the 10 individual market. 11 And, Senator Hannon -- 12 SENATOR HANNON: Okay, but, I agree, and 13 I know there's not there. 14 It's the tendency to -- two things: Save 15 costs, and, to try to go after people who were 16 making some outrageous billing under out-of-network. 17 MARK SCHERZER, ESQ.: Well, and you have to 18 view, first of all, I mean, there's two separate 19 questions here, because the question of 20 out-of-network surprise bills is something you need 21 to deal with with general legislation. 22 That's something that people are, you know, 23 not protected from, even though, for example, we 24 have the exchange negotiating with plans, to say, if 25 someone doesn't have an adequate expert in-network, 1 they get to go out-of-network for it. 2 You're right, that could be an elusory 3 protection, both, because you have to fight your 4 plan; but also because, if you're in the EPO market 5 outside the exchange, you don't have that protection 6 still. 7 There are a lot of -- there are millions of 8 people in the state who don't have that protection, 9 no matter what you do in the context of the 10 exchange, or the implementation of the 11 Affordable Care Act. 12 That's just a question of state law that the 13 Legislature needs to resolve. 14 SENATOR HANNON: Just a question. 15 MARK SCHERZER, ESQ.: Just a question. 16 [Laughter.] 17 MARK SCHERZER, ESQ.: And we think, that 18 Assemblymember Cahill actually has some interesting 19 thoughts he's been given to, how to set a price 20 benchmark, that we think may -- we -- may be able to 21 sort of thread the needle between where the plans 22 are and where the doctors are on what the cost ought 23 to be when people are stuck with surprise 24 out-of-network bills, and that has to be arbitrated. 25 You're absolutely right, Senator Hannon, 1 though, that the price on a rider can be separately 2 set, so that it's a voluntary thing. It's not going 3 to affect the base price within the market if you do 4 require that that be offered. 5 I think the other issue that guided the 6 decision not to have out-of-network coverage in our 7 new market, was the desire to get the PHSPs into 8 the marketplace -- into the exchange marketplace, 9 and, the concern of the health plans, that if the 10 PHSPs were in, and they didn't know how to do 11 out-of-network coverage, and they didn't have to do 12 out-of-network coverage, then the health insurers 13 would be sort of the magnets for the adverse risk 14 that wanted to buy the out-of-network coverage. 15 We think the resolution there is two-fold: 16 One is, you give a transitional period to the 17 PHSPs, to learn how to do the out-of-network 18 coverage; 19 And, second, that you do more robust risk 20 adjustment in the meantime so that nobody gets stuck 21 with disproportionate risk. 22 For the sole proprietors who, in the 23 immediate term, have lost out-of-network coverage 24 that they had, and can't replace it, you have an 25 easy fix in the short term. 1 The easy fix is, that, in order to protect 2 the individuals in the direct-pay market, who had 3 out-of-network coverage, and were about to lose it 4 at the end of last session, you enacted a law that 5 grandfathered them, allowed them to buy a rider on a 6 Platinum plan, in the out-of-network -- 7 out-of-exchange marketplace. 8 You could allow the sole proprietors who are 9 now going into the individual market to buy that 10 very same pre-existing product. 11 There's no, like, startup effort here 12 required. It's there; just allow them to buy it, 13 too. 14 That would be a quick fix for those who are 15 losing coverage right now. 16 The longer-term bill, along the lines that 17 you have proposed, we think is a very good way to 18 go. 19 There may need to be, again, issues 20 addressing what -- 'cause you're, as I understand 21 6207, it addresses just the Article 43s and the 22 Article 32s. 23 There may be other categories that need to be 24 transitioned into that in order to make it work in a 25 fair way. 1 So, I think that there needs to be 2 consideration given there. 3 But, we think the fix is, to a lot of these 4 problems, are within your legislative control, and, 5 we welcome the chance to discuss them with you 6 further. 7 SENATOR HANNON: Well, thank you. 8 And I found it. 9 [Laughter.] 10 SENATOR HANNON: But, it actually went off 11 the -- it got locked in to -- just went off to 12 another site. 13 But the third time, it was right there. 14 ELISABETH BENJAMIN: Good, I'm glad you found 15 it. 16 I mean, because -- and we have, I think, 17 four colleagues, four of our subcontractors, are in 18 Nassau County, Senator Hannon. 19 SENATOR HANNON: No, I can see it. It's on 20 the list. 21 ELISABETH BENJAMIN: Yeah, so we have -- not 22 to mention, you know, the other navigators. 23 SENATOR HANNON: Thank you. 24 ELISABETH BENJAMIN: Thank you both for 25 hanging in there. 1 I'm completely impressed that you guys stayed 2 there. 3 Thank you very much. 4 SENATOR SEWARD: Well, thank you very much. 5 We've had an interesting and insightful 6 hearing, and we'll continue to, not only monitor, 7 but be involved in these issues. 8 Thank you. 9 ELISABETH BENJAMIN: Thank you. 10 (Whereupon, at approximately 2:30 p.m., 11 the joint public hearing held before the 12 New York State Senate Standing Committee on Health 13 and the Senate Standing Committee on Insurance 14 concluded, and adjourned.) 15 16 ---oOo--- 17 18 19 20 21 22 23 24 25