S. 2007/A. 3007, Part G, Section 1 A.6007, Part G, Section 1


Director of Government Affairs


S. 2007/A. 3007, Part G, Section 1 A.6007, Part G, Section 1


Creates a new $69 million tax to fund the New York State of Health Exchange.



The Business Council of New York State strongly opposes similar provisions set forth in the Executive Budget (S.2007/A.3007, Part G, Section 1) and the Assembly one house budget bill (A.6007, Part G, Section 1.)  Both provisions would establish a new $69 million tax on health plans meant to fund the New York State of Health Exchange.  While the Executive and the Assembly take different approaches as to how the ultimate cost of this tax will pass through to the consumer, the end result is the same - the imposition of an unnecessary and superfluous new tax at a time when New York is struggling to attract new businesses and create jobs.

The addition of yet another new tax on all fully insured health and dental insurance policies, on top of more than $5 billion in existing state-imposed health taxes, is unnecessary, unwise and unfair.  When added to the more than $1.7 billion in taxes imposed under the federal Affordable Care Act (ACA), these tax burdens help make health coverage unaffordable for many New Yorkers, and many employers.

The Governor has in the past called for funding the Exchange through dedicated Health Care Reform Act (HCRA) funding, an idea that continues to make good sense now.  With two million new insurance enrollees under the ACA, revenues generated from existing HCRA taxes will exceed $5 billion this year. HCRA taxes, intended to fund hospitals and other health care programs, have in reality become a source of revenue for a wide range of non-health related government spending projects.  A portion of these existing HCRA taxes should be used to fund the Exchange, thus eliminating any need for a new tax.

Further, now with the number of uninsured New Yorkers declining by 1.8 million, another obvious source of funding for the Exchange can be found in the almost $800 million in HCRA monies allocated for indigent care, the same amount allocated in the FY 2014-15 budget; millions of newly insured people should logically lead to a decrease in need for indigent care and these savings could be utilized instead of imposing a costly new tax.

For these reasons the Business Council strongly opposes the adoption of increased health plan taxes as proposed in S.2007/A. 3007, Part G, Section 1 and A.6007, Part G, Section 1.