Observer-Dispatch Column

It’s time for NY to be part of the healthcare solution

Published in the Observer-Dispatch, Utica on March 29, 2010 

ALBANY – This week the New York State Department of Insurance reported something that most of Oneida County’s small business owners already knew – health insurance premiums are increasing at an alarming rate.  

For those who are lucky to have health insurance at all, double-digit premium increases have been the norm for more than a decade. Even in the best economic times, health insurance is vital for small businesses to attract and retain qualified, skilled employees. In times like these – health insurance is a necessity that most small businesses can no longer afford.  A survey by National Federation of Independent Business Research Foundation found a decline in the number of small businesses offering health insurance, due primarily to cost.   

One would hope that New York’s leadership would be sympathetic to this problem and consider solutions to give our businesses some degree of relief. Instead, the opposite has occurred. Legislators are now considering several pieces of legislation that will, if passed, increase small business health insurance premiums even more. Here are just a few of the proposals that will exacerbate small business rates: 

S.7000 – Mandates Coverage for Autism Spectrum Disorder

Health insurance mandates are bills that expand private health insurance coverage for small and medium-sized businesses, but do not apply to larger companies that can self-insure.  Mandates are proven to increase the product cost Since New York is one of the most heavily-mandated states in the nation, it comes as no surprise that our insurance is among the most costly. 

This latest bill requires private insurance to offer expanded treatments to individuals diagnosed with Autism Spectrum-Disorder. ASD is a broad-based condition and across the nation, diagnosis of ADS is rapidly on the rise. Health insurance policies already cover the medical conditions associated with ADS. This legislation would require health insurance to now cover services deemed “educational” in nature - setting a trend for our private health insurance to cover items that are not medically-related. The cost to individual policy holders will be anywhere between 2 & 6%, in addition to the 12.2% that is already paid to offset the cost of New York’s 51 other health insurance mandates. 

Elimination of the Small Business Subsidy

A $100 million was established in 2006 for the sole purpose of helping small businesses offset the costs they would face in paying for the Mental Health Mandate. Last year, the state Department of Insurance concluded that this amount was adequate to meet the needs of New York’s business community.  Despite this knowledge, Legislator’s reduced the subsidy to $80 million last November and are now proposing an additional $30 million cut which would reduce the subsidy to half of the necessary amount.  No alternatives have been proposed to help the business community offset this added cost. 

$4 billion in new fees, assessments and taxes

Any tax on an industry is a tax on the consumer.  Health insurance is a business and it remains naive to believe that any industry, whether the automobile makers, cell phone companies or even health insurers, will absorb any additional costs.  In the past fiscal year, health insurance taxes increased by more than $700 million as a result of the 2008-2009 deficit reduction plan and 2009-2010 budget.  Taxing industry in an effort to close the budget shortfall ultimately harms the consumers. 

Even in the best economic times, a 16% increase is tough to absorb. In today’s economy, if this trend goes unstopped it could further erode the struggling economic base, not only in Oneida County, but across the state. It’s time for state lawmakers to stop casting blame and instead, look at how their own actions to stop the increase.