NY proposes changes to health insurance regulation

The Times Union outlined changes to health insurance that Gov. David Paterson is proposing. He wants to make health care more affordable and accessible by requiring health insurers to get state approval before raising premiums.

The proposal, now before the Legislature, would require companies to seek approval for increases through state Insurance Superintendent Eric Dinallo. Currently the state's "file and use" system gives insurance companies broad discretion for rate increases without state approval.

"It has not worked because self-regulation in this sector has not resulted in the best pricing for New Yorkers," Dinallo said. "It, instead, has resulted in driving New Yorkers out of health plans."

Leslie Moran, a spokeswoman for the New York Health Plan Association, says there are serious problems with the measure. "This is basically a bill that seeks to impose much greater regulation of health insurance premiums," she said. "It's basically exerting price controls on health care. It ignores the underlying factors that are responsible for an insurance premium. It would only regulate the cost of premiums without regulating the cost of providers, hospital cost."

The bill is one of four Paterson proposals intended to help people who can't afford private insurance, but don't qualify for Medicaid, the government health care coverage for the poor.

"There are people who don't qualify for the traditional safety net, but still need help, still need a leg up," said Joseph Baker, acting deputy secretary for Health and Human Services to the governor.

Of New York's uninsured, nearly one in three is between the ages of 19 and 29. Paterson's proposal would allow families to cover children up to age 29 under insurance provided by their employer. They would be eligible if they're unmarried and don't have access to employer-provided insurance. Under the proposal, families would pay the premiums instead of employers, but it would cost less under group policies than if the young adult took out an individual policy.
Most plans now stop this coverage at 23 years old.

Senate Democrats already introduced similar proposals. Dan Weiller, a spokesman for Assembly Speaker Sheldon Silver, said lawmakers would review the proposals; there is a hearing June 8 on prior approval of rate increases.

Paterson also wants to extend COBRA coverage from 18 to 36 months. COBRA allows people who have lost their jobs to continue with the same insurance plan they had under an employer. At $400 a month, it's less than half the cost of insurance on the open market.

The final proposal in Paterson's package would attack managed care to reduce bureaucracy that stands in the way of care and cut down on inappropriately delayed or denied claims. If an insurance company fails to meet a deadline for reviewing a claim, the proposal would require the claim to be approved.

The plan would also reduce the time insurance companies have to pay doctors and hospitals to 15 days instead of 45 days.

"You have a fairly regulated (health care) market," Dinallo said. "The delivery of health care, not just insurance: Providers have regulated reimbursement and Medicaid and Medicare have built in ceilings, so when you have that, but you have one sector that is exclusively free market, you take the air out of the balloon."