F or once, Gov. Cuomo can thank his lucky stars that New York’s health insurance system has been so badly regulated and expensive. That dysfunction — a preexisting condition, if you will — is now saving Cuomo and the state from the worst of the fallout from the latest Obamacare snafu.
As the President admitted in last week’s painful news conference, his promise that “if you like your health plan, you can keep it” has proven flat-out false for a significant fraction of Americans.
In fact, Obama’s health reforms have blown up the so-called direct-pay market for insurance, orphaning millions across the country who buy coverage individually rather than through employers.
But Cuomo could accurately declare on Monday that, “We haven’t had the kind of issues that they’ve had nationwide. . . . We’ve had actually very good success with our program, so we don’t see any reason to change it now.”
True enough — because New York has hardly any direct-pay insurance market left for Obamacare to destroy. Albany did that job long ago.
Back in 1993, under Gov. Mario Cuomo, state lawmakers passed a law requiring insurance companies to sell coverage to anyone who’s willing to pay, regardless of preexisting illnesses, and to charge all comers in a given region the same amount, regardless of age or health condition.
The Legislature followed up in 1996, under Gov. George Pataki, by establishing minimum benefits that all policies sold in New York must cover.
In short, they imposed regulations not unlike those in Obamacare — but missing the crucial component of requiring everyone to sign up. If they wanted to, people could put off paying premiums until they got sick .
What happened next was entirely predictable: Saddled with high costs of care for a sicker-than-average population, insurance companies kept raising that single price they had to charge to all customers, leading to healthier people dropping coverage, leading to a sicker insured group, leading to more premium hikes, etc., etc.
It’s known in the business as a “death spiral.” As things stand now, only 16,000 New Yorkers still buy direct-pay insurance, down from 120,000 when the minimum-coverage law took effect in 1996.
The yearly cost in New York City now ranges from $12,000 to $33,000 for an individual, and $38,000 to $84,000 for a family.
Yet some people are willing to pay even those astronomical prices because their medical costs are even higher.
For them, Obamacare really is a good deal. By purchasing a plan through New York’s health exchange, they stand to cut their premiums by an average of 53%. Some will also qualify for tax credits that save them even more money. And to the Cuomo administration’s credit, NYStateofHealth.gov is working far more smoothly than the federal site.
While the state Department of Financial Services has not formally said so, Cuomo’s comments strongly suggest that New York will not be going along with the President’s last-minute Obamacare fix, which theoretically allows people to keep their existing coverage for one more year .
And few people — Obama included — are likely to object.
It’s a very different story in other states, where millions of people rely on the direct-care insurance market and — contrary to Obama’s promise — are seeing that coverage evaporate.
They’re understandably ticked off — not just about losing health plans they’re happy with, but about being forced to shop for new plans through the notoriously glitchy HealthCare.gov and possibly shell out a lot more for benefits they didn’t want in the first place.
The reality is that the country could never achieve the crucial goal of universal coverage without clearly defining what “coverage” means. Those requirements — when coupled with the so-called individual mandate — have worked to rationalize the health-care system in Massachusetts, and still stand a chance of working in the United States.
But, as Obama knew or should have known, those changes were guaranteed to displace a certain percentage of people from the health plans they had, and liked.
Or, as he squeamishly said of his broken promise on Thursday: “There is no doubt that the way I unequivocally put that forward ended up not being accurate.”
He should have leveled with Americans from the start about the implications of his health reform — instead of making commitments he could not keep.
whammond@nydailynews.com
