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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

S.6608 / A.9708, Part B

Support

SUBJECT:

Health Insurance Taxes

 

DATE:

March 10, 2010

 

The Business Council of NYS, representing over 3,000 businesses with over 1 million employees, opposes the Article VII budget language which proposes to expand the Health Care Reform Act (HCRA) surcharge of 9.63% to cover surgical and radiological services performed in private ambulatory centers, physicians' offices and urgent care settings.

The HCRA surcharge is a tax on all hospital discharges in the State and is paid by all health insurers and benefit administrators.  It results in higher premiums for all New Yorkers and makes health coverage increasingly unaffordable for businesses across New York State. 

The HCRA surcharge imposed on private health insurance has increased 351% since the program was implemented in 1997.  The current surcharge of 9.63% which is applied to hospital services generates approximately $2.3 billion.  As proposed in the Governor's budget, the surcharge would be expanded to cover an array of services, generating approximately $100 million in additional revenue annually. 

Currently, HCRA taxes alone add approximately 4% to the cost of every health care premium dollar.  If this proposed expansion of the HCRA surcharge is enacted, it will increase that burden, creating yet more obstacles to the affordability and accessibility of health insurance to the majority of New Yorkers who access health insurance through the private market.

We oppose taxes on health insurance premiums and services and ask the Legislature to reject this proposed HCRA surcharge expansion which will drive costs higher and increase the burdens on business owners who may be forced to reduce or eliminate coverage for their workers.  When the national and state debate is all about coverage and affordability, this proposed tax increase serves only to increase premiums and costs to all New Yorkers, with no associated benefit in terms of coverage.

For these reasons, we oppose the budget language in S. 6608/A.9708, Part B.