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Legislative Memo

Lev Ginsburg
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.7166 (Hannon)

Support

SUBJECT:

Mandating insurance providers and doctors sign explicit contracts for plans sold on the state health exchange

 

DATE:

May 16, 2014

 

The Business Council of New York State, Inc. opposes S.7166 (Hannon) which would impose yet another costly mandate on health plans. Specifically, this bill would require health plans which sell coverage on the state health exchange to essentially renegotiate with doctors and sign explicit contracts for those doctors to participate in networks sold on the state health exchange.

Many providers have long-standing negotiated contracts with health insurers that set the terms of those providers' participation in an insurer's network. Some of these contracts pertain to specific product networks, while others were negotiated to include participation in all networks offered by the contracting insurer, thus insuring that the networks of providers, available both on and off exchange, offer the best coverage for consumers.

Robust health-care networks are the cornerstone to controlling healthcare costs and promoting health and wellness. This legislation, that would mandate all health insurers to renegotiate existing contracts with doctors for participation in  exchange-specific networks would likely weaken existing networks and no doubt result in increased health insurance premiums for New Yorkers shopping for insurance on the exchange.

The enactment of this legislation undermines the right of contract between private parties and would translate into increased health insurance premiums, making coverage less affordable for employers and employees as health care providers opt out of network participation or use the leverage granted them by this legislation to renegotiate greater reimbursements.

The increased costs that would result from this legislation will be quickly reflected in premiums charged to employers and - increasingly - shared by employees.

For all these reasons the Business Council respectfully opposes the passage of S.7166.