Medicaid Redesign Team Recommendation #264


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Medicaid Redesign Team Recommendation #264


Extend HCRA Surcharge to Outpatient Services



The Business Council of NYS, representing over 3,000 businesses with over 1 million employees, opposes the Medicaid Redesign Team Recommendation #264 which proposes to expand the Health Care Reform Act (HCRA) surcharge of 9.63% to cover surgical and radiological services performed in private ambulatory centers, physicians’ offices and urgent care settings. The proposal is estimated to "save" the state $100 million by adding costs to premiums which are among the highest in the country.

The HCRA surcharge is a tax on all hospital discharges in the State and is paid by all health insurers and benefit administrators.  It results in higher premiums for all New Yorkers and makes health coverage increasingly unaffordable for businesses across New York State. 

The HCRA surcharge imposed on private health insurance has increased 351% since the program was implemented in 1997.  The current surcharge of 9.63% which is applied to hospital services generates approximately $2.3 billion annually.  Currently, HCRA taxes alone add approximately 4% to the cost of every health care premium dollar.  If this proposed expansion of the HCRA surcharge is enacted, it will increase that burden, creating yet more obstacles to the affordability and accessibility of health insurance to the majority of New Yorkers who access health insurance through the private market.

We oppose taxes on health insurance premiums and services and ask the Task Force to focus on the mission of re-engineering a Medicaid program which is the most costly in the country.   Cost shifting to the commercial insurance market is not re-engineering; this proposal merely increases further the subsidy that private health insurance pays to sustain Medicaid.   When the national and state debate is all about coverage and affordability, this proposed tax increase serves only to increase premiums and costs to all New Yorkers, with no associated benefit in terms of coverage.

For these reasons, we oppose Recommendation #264 of the Medicaid Redesign Team.