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Legislative Memo

Lev Ginsburg
Director of Government Affairs
T 518.469.4463
www.bcnys.org

BILL:

A.9507-B (Budget) Part O, Sections 17-a - 17-l

Support

SUBJECT:

Early Intervention Cost Shift

 

DATE:

March 23, 2018

 

The Business Council opposes A.9507-B Part O, Sections 17-a – 17-l, which would create a new fiscal mandate on private health insurers, labor unions and self-insured employers by shifting Early Intervention (EI) costs from the state and municipalities to commercial health insurers, self-insured businesses and unions that pay into the covered lives assessment (CLA).  The Assembly’s proposed assessment for the coming fiscal year is $25 million.

The health insurance sector in New York already pays the majority of some $5 billion in state-imposed Health Care Reform Act (HCRA) taxes.  This program, which was originally an effort to drive change and efficiency to New York’s hospital industry, has evolved into a revenue generating machine and ranks as the state’s third largest tax. The State currently collects over $5.5 billion per year in tax revenue in hidden surcharges that add as much as 6.2 percent to a typical family’s insurance costs, compounding the impact of premiums and deductibles to working and middle class families.  This budget proposal would unnecessarily add to the burden.

The cost-shift to self-insured employers and unions is especially problematic.  Most EI services are educational in nature rather than health related.  Accordingly, self-insured health coverage does not cover all EI services.  This Assembly proposal would effectively make employers pay for services that are not health related.

This amounts to little more than a governmental cost shift to insurers, businesses & unions who pay the CLA.  Should the state’s experience with HCRA be a guide, $25 million is just the starting point.  Employers of all sizes already struggle with the costs of healthcare for employees.  This provision would simply make it more difficult.

For these reasons, The Business Council opposes A.9507-B Part O, Sections 17-a – 17-l.