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Press Release
Nov. 27, 2006

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Policyholders will continue to pay as long as Health Insurance Mandate Review Commission is ignored

By Jeff Leland, chair
This spring the New York State Legislature ended years of drawn out debate by agreeing to legislation that would expand the breadth of mental health benefits required in health insurance policies. For small and medium-sized businesses, the compromise was bittersweet. While mandating minimum coverage for these services, the legislation for the first time recognized the hardship of rising premiums on small firms (less than 50 employees) by including a provision that will have the state underwrite the entire cost of these mandated services. The downside of the legislation is that despite wide disagreement by vying interest groups on the premium impact of these additional services, it will take several more years before we will know the true cost of this mandate – because the Legislature has no formal process to evaluate proposed health insurance mandates. This reality needs to change.

As business owners cite rising health care costs as their greatest concern, state legislators are dragging their feet in finalizing a bill that will provide relief from the burden of health insurance mandates. While health insurance mandates are only one factor that influences premium costs, they are an area that the Legislature can, and should control.

Insurance mandate bills, like the mental health legislation expected to pass the Assembly in December, are often counterproductive. Mandates expand the scope of the basic health insurance policy, increasing costs and causing the number of working, uninsured New Yorkers to escalate. New York has the distinction of being a state with one of the highest insurance premium rates in the nation and one of the most heavily mandated states in the union – two very good reasons why lawmakers should wait no longer to implement a Health Insurance Mandate Review Commission.

The concept of a health insurance mandate review commission is not new. According to The Council for Affordable Health Insurance, our state has 46 different health insurance mandates required in every policy sold in the state and lawmakers consider nearly 100 more every year without the benefit of an independent analysis prior to passage. Twenty-six other states have already decided that any measure that may increase costs and diminish coverage needs to be scrutinized before consideration, including our closest neighbors, Pennsylvania, Vermont, Massachusetts and New Jersey.

Even without the benefit of an independent analysis commission, the numbers continue to speak for themselves. Studies exist which have conclusively determined that there is a nexus between high premium costs and the number and cost of state health insurance mandates, including several commissioned here in the past six years. For instance, New York’s chiropractic mandate law (1998) included a requirement that the Department of Insurance study the impact of this new mandate. That study, quietly released in 2000, determined that the cost of these services accounted for as much as 2.6% of premium and concluded that there were “no savings attributable to the passage of the mandate.” Unfortunately, this study was done after the enactment of the legislation, leaving little doubt that if such a study were available to lawmakers prior to the passage of this mandate, the legislation would have looked very different – or perhaps would not have been passed at all. It has since been determined that the chiropractic mandate is one of the most expensive mandated services in New York adding more than $265 to the annual premium of every family policy in New York. In 2002, while considering a mandate to cover computer aided detection (CAD) mammograms, the legislature wisely passed a bill that called for the Department of Insurance to formally study this issue. The report concluded that a lack of data prevented a recommendation to mandate computer aided detection screenings. Since that time new studies on CAD have been released. If a commission was in place, they might be able to effectively track scientific advances to determine if their findings in 2002 are still appropriate today. Finally, in 2003, the Employer Alliance issued an independent actuary report on the cost of New York’s mandates. That study concluded that the current mandate burden cost every fully insured policy 12.2% annually – nearly $1,300 on every family policy.

If we are to keep premiums affordable, we must first ensure that government takes no action that would increase premiums. A Health Insurance Mandate Review Commission will provide the necessary data to help lawmakers make sound decisions that will ensure their actions won’t further erode our insurance coverage. As business owners, we cannot sit back and wait for this to happen.

We have a head start. The governor and state legislators have already completed the hardest task in implementing this commission when they earmarked $300,000 for such an entity in the last state budget, pending passage and approval of implementation of this (S.8481) legislation. The Senate introduced legislation largely mirroring an existing Assembly proposal that would create a commission charged with providing independent reports that outline the cost and medical efficacy of health insurance mandates prior to their passage. Now it seems that only the dysfunction of Albany politics stands between the passage of this necessary legislation and more affordable health insurance. The bill remains largely ignored and the $300,000 agreed to by both houses in the budget will be lost if the legislation is not passed by March 31.

Access to basic, affordable health insurance will continue to erode if Legislators remain without the benefit of a Health Insurance Mandate Review Commission. We cannot afford to let that happen.

The Employer Alliance for Affordable Health Care has started a petition urging lawmakers to put the politics aside and enact a mandate commission when they return for a special session on December 13. This is our best shot at changing a dysfunctional process and giving New Yorkers, the solid, fact-based decisions we deserve. It is not only good business to get the facts before making a decision; it is basic common sense. Add your voice today and tell lawmakers to put politics aside and give New Yorkers the benefit of a Health Insurance Mandate Review Commission. To sign this petition visit our website at www.employeralliance.com and tell your elected officials that New York needs and deserves, a Health Insurance Mandate Review Commission.

Editor’s Note: The author is chairman of the Employer Alliance for Affordable Health Care, a coalition of more than 2,500 employers, individuals and local governments from across New York State who are committed to preserving quality affordable health care. He is also the president of Leland Paper Co. in Glens Falls.