MEMORANDUM IN Support

The Employer Alliance for Affordable Health Care is a grassroots coalition of nearly 3,500 employers and individuals committed to keeping health care in New York affordable.  S.3020-A/A.6159 seeks to establish a more rational approach to legislating health insurance mandates by creating the New York Health Benefit and Cost Commission that in part would provide the Legislature with cost/efficacy studies for health insurance mandate proposals prior to legislative consideration. We enthusiastically support its passage.

Affordable health insurance continues to be a critical concern for businesses statewide, especially for small business owners.  Recent surveys sponsored by the Business Council, NFIB and others have concurred that health care costs are the number one concern for small business in New York.  Contributing to increased health insurance costs are state mandated services and benefits.  The burden of health insurance mandates falls predominately on small businesses and the self-employed – because many large companies can take advantage of moving to self-insurance and escape state benefit requirements.   How costly are mandates in New York?  The Employer Alliance released a landmark study in 2003, which concluded that mandated benefits in New York cost every policyholder 12.2% of premium – or more than $1,300 for a family policy.  With health care costs rising well above the rate of inflation the past several years, lawmakers must be informed of the total impact of passing any additional mandates.

The need for this legislation is critical.  The recent debate over mental health parity highlights the importance of this proposal.  Advocates for the mental health mandate bill indicated that the cost of the additional mental health coverage would be minimal – “a cup of coffee” was the slogan used.  The Governor’s budget shed some light on the true cost of this legislation and determined that it would cost $100 million for the small business subsidy alone!  It will likely cost large employers even more as the mandate required large groups to cover an even wider array of benefits.  If unbiased cost estimates were made available to the legislature, it is very likely that this legislation would have looked very different – or perhaps never been passed at all.

We note that the 2006-07 budget included a joint legislative initiative to appropriate $300,000 to enact a mandate commission pending implementing legislation.  Although the implementing legislation was not passed, S.3020-A/A.6159 represents the current state of negotiations between the houses and it appears that there are no areas of disagreement between the houses.  Accordingly, now is the time to enact this legislation and allow New York to join with 26 states including our immediate neighbors Pennsylvania, New Jersey, Vermont and most recently Massachusetts require a cost/efficacy analysis for health insurance mandate bills. 

For businesses and all premium payers struggling to maintain coverage, this proposal is long overdue.  Never has the need for this legislation been more critical.  Vote YES on S.3020-A/A.6159.