Date: June 11, 2007
Bill:S.6506 (Hannon)/A.8704 (Bradley)
An act to amend the public health and insurance laws in relation to ensuring investments in health care.
This legislation is another misguided effort to establish a community
reinvestment program by excising excessive profits from health plans and
“reinvest” that money into New York’s health care system. The Employer
Alliance for Affordable Health Care is a coalition of nearly 3,500
small and medium size employers dedicated to keeping health insurance
affordable by reducing government mandates. While the focus of the
Alliance has been on traditional provider and service insurance mandates
that disproportionately impact small employers, this legislation
represents a bald face attempt to highjack money that has been
accumulated through the premiums paid by small businesses and sole
proprietors. The Employer Alliance demands that any excess premium paid
to health plans and earmarked for “reinvestment” should be returned to
the businesses and premium payers that paid them in the first place.
While this proposal to redirect “excess profit” is dubious enough, we
have equal concerns as to where this money is being earmarked. Under
the terms of the bill, revenues raised from this tax will once again go
to subsidize health care infrastructure – presumably hospital
operations. What the sponsor of this bill fails to realize is that
there is already a substantial investment being made by the state and
federal government targeted to hospitals statewide. In addition to the
HEAL grants authorized as part of the Hospital Rightsizing Commission,
hospitals will soon also be able to take advantage of federal programs
(“Fsharp”) created to address this same need.
Health care costs are the number one concern for small businesses in New
York. Years of double-digit increases in excess of the rate of
inflation, has left New York premium payers beleaguered. In tandem with
those high premiums, New York’s businesses pay substantial taxes to
underwrite New York’s health care system. In fact, no other state taxes
health insurance premium payers as aggressively as New York.
Currently, employers pay more than $2.5 billion annually to finance bad
debt and charity care as well as Graduate Medical Education. New York
State’s health Insurance taxes represent the second highest tax on
employers - second only to corporate franchise taxes.
This legislation ignores the needs of those who have underwritten
hospital and health care services in New York for decades. While we
leave it to regulators to determine the proper level of plan reserves to
ensure the future payment of provider claims, in all fairness, any
so-called excess must be returned to the small businesses and
individuals who paid them.
For all these reasons, the Employer Alliance for Affordable Health Care
stands with the Business Council of New York State, the National
Federation of Independent Business in opposing the passage of
Employer Alliance For
Affordable Health Care
Albany, New York 2201-1412
Jeff Leland, Chairman