Notice of Public Hearing
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Limited Benefits Health Plans
The New York State Insurance Department (Department) will conduct public hearings in Rochester, Newburgh and New York City [or a Long Island Location] to gather information about limited benefits health insurance plans, which provide less than comprehensive hospital/medical coverage. The goal is to ascertain how these policies are marketed by insurers and producers, assess what disclosures are made regarding the services they cover, evaluate what (if any) advantages these policies provide, and determine whether additional oversight and regulation is required to protect consumers.
The cost of healthcare has increased in recent years, impacting the cost of health insurance. As a result of these rising costs, 16% of New Yorkers are uninsured. Serious illness or injury can mean catastrophic medical bills and lead to personal bankruptcy. Many consumers and small businesses searching for affordable coverage purchase limited benefits health plans as a means of insuring against potential liability. These limited benefits health plans may provide a false sense of security. If injury or illness occurs and an insured files a claim, they may find that they have less coverage than they thought.
In addition, the marketing and sales of these policies may add to the confusion. Many limited benefits plans are solicited via the Internet and through television commercials. Some of the advertisements imply that the policies provide comprehensive or major medical coverage, and fail to disclose exclusions and policy limits. The sales are completed via the Internet or telephone without the benefit of a written application, circumventing specific disclosures required by governing New York law. Department investigations also have revealed that some policies are sold through telemarketing firms using unlicensed agents, which runs afoul of the New York Insurance Law.
The Department also has found that some insurers issue limited benefits health plan policies as group coverage through invalid associations. Consumers must join the association for an additional fee in order to be eligible to purchase the coverage. While New York law permits the issuance of group insurance to valid associations, some associations are formed or maintained for the primary purpose of obtaining insurance, which is not permitted in New York.
The purpose of the hearings is to gather information from the public about limited benefits health plans, and to hear any concerns that the public may have about these products and related sales and marketing practices. The Department welcomes input from consumers and consumer representatives, business groups, chambers of commerce, insurance companies and their trade associations, insurance producers and their trade associations, senior citizen organizations, academics, members of the general public and any other interested parties. Oral and written testimony should focus on solicitation of limited benefits plans, disclosures of benefits and limitations, or the advantages and disadvantages of purchasing these products. In addition, testimony may focus on the impact to consumers when invalid associations market and sell limited benefits health plan policies, and whether new regulations or legislation is required to restrict or prohibit such policies.
Information about the hearings is available at the Department’s website, www.ins.state.ny.us. Testimony can be scheduled and written testimony submitted through the website.
Written comments for the hearing record also may be submitted to Limited Benefits Health Plans Hearings, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street, New York, NY 10004, or e-mailed to PublicHearingsComments@ins.state.ny.us with the subject line “LIMITED BENEFITS HEALTH PLANS HEARINGS.” The Department will accept comments for up to 15 business days after the final public hearing.In accordance with the Americans with Disabilities Act, the Department will provide a reasonable accommodation, including interpreter services for the hearing impaired, at no charge to any covered individual wishing to testify at these hearings, provided that such a request is received at least five business days prior to the particular hearing date and either communicated in writing to Limited Benefits Health Plans Hearings, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street, New York 10004, or by calling the Department at (212) 480-5262.
The hearings will be webcast live. The hearings are scheduled as follows:
DATE: September 21, 2009
New York State Insurance Department
Neil Levin Hearing Room
25 Beaver Street, 5th Floor
New York, NY
TIME: 10 a.m.
DATE: September 24, 2009
Newburgh Board of Education Auditorium
124 Grand Street
TIME: 10 a.m.
DATE: September 30, 2009
Central Library of Rochester and Monroe County
115 South Avenue
TIME: 10 a.m.