Budget Health Care Proposals Offer Wrong Prescription for New York

Proposals Increase Health Care Costs; Decrease Coverage, says New York Health Plan Association

The New York Health Plan Association (HPA) today commended Governor Paterson for taking a conservative approach to balancing his budget, but criticized several proposals in the 2010-2011 spending plan that make it harder for New York small businesses and families to balance their budgets.

“Health plans in New York are acutely aware of New York’s current fiscal difficulties and the state’s history of overspending, as evidenced by the nearly $850 million in new and increased health insurances taxes in last year’s budget,” said Paul Macielak, HPA president & CEO.  “That’s why certain provisions in the Executive Budget that add to this burden are so troubling.”

HPA identified the following provisions that would further drive up the cost of insurance coverage in New York:

¨      Shifting the costs of early intervention (EI) services onto health insurance coverage;

¨      Further cutting the state’s subsidy to small businesses to cover the costs of Timothy’s Law; and

¨      Expanding the patient services “sales tax” to certain physician services.

Collectively, these actions will add approximately $150 million in new premium costs. 

At the same time the state is adding to the cost of insurance, other budget proposals would make it more difficult for plans to do business in New York.  These provisions include:

¨      Reinstating a failed “prior approval” process for health insurance premiums, which amounts to government price fixing for health insurance; and

¨      Reducing premiums for Medicaid Managed Care and Family Health Plus plans by 1.7 percent, making it increasingly difficult for plans to provide high quality care to these populations. 

“Ultimately the result of these actions will be higher health care costs for small businesses and families who are finding it increasingly difficult to afford health insurance coverage in New York,” said Macielak.

HPA looks forward to working with the Governor and Legislature on budget solutions that meet the state’s fiscal objectives without impacting affordability of health care for New Yorkers.