The Business Council opposes this legislation, which would require expansion of the Timothy's Law mental health mandate to include coverage for post traumatic stress disorder (PTSD) among the list of biologically based mental illnesses covered under this law. While mandates place coverage requirements on health plans and insurers, it is the purchaser of health coverage – the employer and covered worker – that is ultimately responsible for the increased cost of a new or enhanced mandated benefit reflected in higher premiums.
The Business Council urges state lawmakers to suspend consideration of this and any other proposed mandate until the composition of New York's mandate review commission is complete and operational so that the full impact of proposed mandates can be objectively determined. Beyond examining the impact of this proposed mandate expansion, the commission could also evaluate the need for the expansion in light of last fall's enactment of changes to federal mental health parity law. These federal changes would render the proposed expansion unnecessary for large employers and costly for small businesses.
The Timothy's Law mandate requires that employees of large (51 or more employees) and small (50 employees or fewer) businesses covered under group health insurance are entitled to care for mental, nervous, or emotional disorders for no less than thirty days of inpatient care and twenty visits of outpatient care per year. The deductibles, co-payments and coinsurance applied to these benefits may be no greater than those applied to other benefits under the employer's policy agreement.
In addition, groups with more than 50 employees are entitled to mental health benefits for the following biologically based mental illnesses comparable to their level of coverage for other health benefits under the policy. These illnesses include: schizophrenia/psychotic disorder; major depression; bipolar disorder; delusional disorders; panic disorder; obsessive compulsive disorder; bulimia; anorexia.
The law includes additional provisions for children under age 18, exempts small businesses from mandated coverage of the above-listed biologically based illnesses, and does not apply to those covered under self-insured plans or who purchase coverage on their own in the direct pay market. The law also requires the State Department of Insurance to conduct a two-year analysis of the law to study its costs and utilizations trends.
It is widely acknowledged that while mandates make health coverage more comprehensive, they also make coverage more costly – prompting some employers to drop coverage or shift more of the cost to their workers. By increasing the cost of coverage, mandates add to the cost of doing business and make New York less competitive.
As part of the 2007-08 State Budget, the New York State Health Care Quality and Cost Containment Commission was created to analyze the impact that proposed health insurance mandates will have on health insurance costs and quality. (See Sec. 213 of State Insurance Law.) A mechanism supported for years by The Business Council, a mandate review commission will promote a thoughtful, objective review of proposed mandates and their costs and benefits prior to a full vote by the Legislature.
Not every one of the nearly 80 to 100 proposed mandates introduced at the Capitol would be subject to the Commission's scrutiny; only those proposed mandates that have been requested for review by the governor, the Senate Insurance Committee Chair or the Assembly Insurance Committee Chair would be subject to the Commission's evaluation.
Approximately 28 other states have mandated benefit evaluation laws, according to the Blue Cross Blue Shield Association. Particularly noteworthy is the Pennsylvania Healthcare Cost Containment Council (PHC4), which was created more than 20 years ago and has reviewed nearly two dozen proposed mandates. Policy experts contend that these commissions have contributed to the slowed growth of new or expanded mandates in recent years.
State lawmakers should complete the appointment process and allow New York's mandate review commission to become operational before expanding the list of biologically based illnesses covered by Timothy's Law to include PTSD or passing any additional insurance mandates. Further, it would be premature to expand Timothy's Law before the Insurance Department's study of the mandate's effectiveness is complete. Findings of the study are due on or before April 30, 2009.
For the reasons described above, The Business Council respectfully recommends that S.185/A.4572 be held in committee.