New York HPA on Health Plan Dividends/Increased Regulatory Oversight

Statement by Paul Macielak, president & CEO, New York Health Plan Association

“Health plan dividends generally represent multi-year earnings and investments, and are derived from all lines of business.

“Despite dollar amounts that sound substantial, profit margins for health plans in recent years have been is in the 2%-3% range.

“Reinstating a prior approval process would, simply put, be government price fixing. Artificially setting rates will not get at the underlying factors that go into rates and are the main drivers of rising health insurance costs — increased utilization and an aging population, higher hospital costs (both in and outpatient), physician and drug costs, to name a few. 

“Also helping to drive up the cost of coverage is the high — and continually growing — level of taxes on health insurance.  This year alone, New York lawmakers increased state taxes on health insurance by more than $700 million, bringing the annual health insurance tax levy to more than $4 billion.  Now federal lawmakers are looking at making a bad situation even worse, with the U.S. Senate proposing a $6.7 billion annual health insurance premium tax.

“Far more than dividends, taxes are driving up costs and threatening New Yorkers’ ability to afford coverage. ”