MEMORANDUM IN SUPPORT
Bill: S.8481– An Act to amend the insurance law
and the legislative law in relation to implementing the health care quality and
cost containment commission.
The Employer Alliance for Affordable Health Care is a
grassroots coalition of more than 2,500 employers and individuals committed to
keeping health care in New York affordable. S.8481 seeks to establish a more
rational approach to legislating health insurance mandates by creating the New
York Health Care Quality and Cost Commission to provide the Legislature with
cost/medical efficacy studies on proposed health insurance mandate prior
to legislative consideration. We
enthusiastically support its passage.
The Employer Alliance applauds our lawmakers and the
Governor for agreeing to underwrite this proposal with a $300,000 appropriation
in the 2006-2007 budget. S.8481 is required to
formally establish the commission, its duties and functions. Without this implementing legislation, New
York will miss an opportunity to procure an important weapon in the crucial
fight for affordable health insurance.
insurance markets are in crisis and the symptoms of this crisis are
- According to the United Hospital Fund, in 2003
employer-based health insurance coverage in New York State
dipped to 60%. In New York City that
number is a shocking 47%. Surveys
confirm that the overwhelming reason why employers don’t provide coverage is
- Despite intensive efforts to enroll eligible New
Yorkers into subsidized programs, nearly one-in-five non-elderly New Yorkers
still have no health insurance. That number drops to one-in-four in New York
- Family health insurance premiums in New York cost nearly as
much ($11,400) as the annual wages for a full-time minimum wage employee.
- Recent surveys by the NFIB and the Business
Council confirm that health insurance costs – not taxes – are the leading
concern for small businesses in New
Numerous studies have conclusively determined that there
is a nexus between high premium costs and the number and cost of state health
insurance mandates. If we are to keep
premiums affordable, we must first ensure that government takes no action that
would increase premiums. An independent
mandate commission will provide the necessary data to help lawmakers make sound
decisions that will ensure their actions won’t further erode insurance coverage
in New York.
While New York
has not had the benefit of a mandate commission, it has undertaken two mandate
studies in the past six years with beneficial results, highlighting the
importance of having a full-time commission.
New York’s chiropractic mandate law (1998) included a requirement that
the Department of Insurance study the impact of this new mandate. That study, 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.
We have little doubt that if such a study were available to lawmakers
prior to the passage of this mandate, it 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 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
Mandate commissions are not a
new concept. Twenty-six other states
have enacted laws to create entities similar to the one envisioned in
S.8481. This includes our closest
neighbors, Pennsylvania, Vermont, Massachusetts and New Jersey. These states have all decided that any
measure that may increase costs and diminish coverage needs to be scrutinized
before consideration. As a state with
one of the highest premium rates in the nation, our legislators need a
commission to provide them with the data they need to make sound decisions.
Taking the lead from Massachusetts, many states are now seeking
innovative approaches to address the chronic uninsured. Before they can make a significant step in
this direction, states must first make sure that those with insurance have the
capacity to continue to afford it. A
mandate commission will help make this happen in New York. The New York Legislature has already seen the
wisdom of such an entity and supported it with a $300,000 appropriation. It would seem that only the dysfunction of
Albany politics stands between the passage of this necessary legislation and
more affordable health insurance. We
hope lawmakers will take the lead and pass this long over-due legislation.