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Zack Hutchins
Director of Communications

May 4, 2005

Council urges legislators to reduce health-insurance mandates and reject new ones

The Business Council and more than two dozen other business groups today renewed their call
for relief from state mandates that inflate the cost of health insurance.

Using “Cover the Uninsured Week” as a backdrop, The Council and various chambers and business groups lobbied lawmakers in Albany today to make the point that more health insurance mandates will increase insurance premiums and lead to more uninsured New Yorkers, especially among small
businesses and their workers.

“By driving up costs, mandates erode job-based coverage,” said Elliott Shaw, director of government affairs, for The Business Council. “ As a result, you have more uninsured, which puts additional pressure on public governmental programs.”

Shaw and other business advocates emphasized several points in their lobbying:

The main reason employers don’t cover employees is the cost of insurance, and
New York’s growing number of mandates is a leading contributor to rising costs is the
increasing number of insurance mandates, Shaw said. New York currently has 42 insurance mandates, fourth highest in the country. According to a 2003 report by NovaRest Consulting, New
York’s mandated benefits increase health insurance premiums by 12 percent.

Mandates being considered by the Legislature include requiring coverage or expanded coverage of mental health and substance abuse treatment, chiropractic care, cosmetic surgery, and alternative

In 2003, the insurance industry projected a 3.5% impact on premiums if the mental health and substance abuse parity mandate known as “Timothy’s Law” is enacted. Only four states have enacted mandated mental health coverage similar to “Timothy’s Law”, and at least 18 states exempt small businesses from the mandate. Most also place limits on coverage, including cost-sharing provisions, medical management, and cost caps due to a recognition that this type of legislation has significant cost implications.

Most recently, both Iowa and Washington passed parity laws that exempt businesses with 50 or fewer workers. These laws with small business exemptions have been applauded by their supporters as “good parity laws”.