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The Business Council strongly opposes S.6667(Valesky) /A.9311(Gottfried), which would create yet another tax on health insurance, the cost of which will be ultimately borne by New York’s families and small employers.
In the fall-out from last year’s closure of the Health Republic Insurance of New York, the nation’s largest “co-op” health plan created under the Affordable Care Act (ACA), by the Department of Financial Services, 215,000 consumers lost their coverage and a number of hospitals and physicians were not paid millions of dollars in services charged.
Even though the collapse of Health Republic should have been foreseeable by the regulator and even though New York’s private insurers came together to assist in making sure that over 215,000 New Yorkers would experience no discontinuation of coverage, this bill would put the entire onus of paying for Health Republic’s failure on New York’s insurers and ultimately, New York’s premium payers.
The creation of a health insurance guaranty fund in New York is the wrong answer to the problems created by the failures of Health Republic. This bill would not only fail to address the underlying issues of prior approval and premium rate-setting in New York, it would create yet another new tax on health insurance that will simply hurt consumers by making health coverage even more expensive.
While supporters of this bill argue that New York is the only state without such a guaranty fund, they fail to take into account that New York is also the only state whose premium payers are subject to a $5.6 billion tax through the Health Care Reform Act (HCRA). This tax alone adds 5 percent to the cost of current health insurance premiums. Adding another tax on New York’s families and small businesses to pick up the tab for failures of those involved with Health Republic is not only the wrong course of action but it is just plain wrong.
For these reasons, The Business Council strongly opposes the adoption of S.6667(Valesky) /A.9311(Gottfried).