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Superintendent of Insurance Howard Mills today praised Congress for their commitment to reforming health insurance, but expressed concerns about some aspects of the federal proposals. He urged lawmakers to proceed with caution as they continue their deliberations. The Health Insurance Marketplace Modernization and Affordability Act of 2006 (S.1955) was recently approved by the U.S. Senate Committee on Health, Education, Labor and Pensions. It calls for businesses and trade associations to join forces and offer group health coverage on a national or statewide basis.

"This action (the Senate committee vote), in conjunction with the House’s passage of HR 525 (the Small Business Health Fairness Act of 2005) is clear evidence of Congress’ commitment to expanding access to quality health insurance for small businesses and their employees at affordable prices," Superintendent Mills stated. "While the Insurance Department shares that commitment and commends Congress for addressing this critical issue, I must express my deep concern that both pieces of legislation, though laudable in intent, share a number of provisions that could create serious unintended consequences in New York."

New York’s open enrollment/community rated system, which gives small businesses and individual’s access to affordable health insurance coverage, would be set aside if S.1955 became law as insurers recruited younger and healthier individuals while discriminating against older New Yorkers, or those who previously had been ill. Today, New York requires insurers to provide coverage for all small businesses and individuals regardless of age, gender, occupation or health and pools the entire group’s collective risks to produce one premium that all of them can afford.

In the absence of a diverse population of insurable risks, New York’s innovative Healthy NY program would likely see its enrollment drop dramatically. Since 2001, Healthy NY has provided partially state-funded health insurance, with a set benefit package, to thousands of qualifying small employers, sole proprietors, and individuals.

New York's external review program, prompt pay law, and the state's market conduct review standards could also be imperiled if Congress passes a bill that preempts state consumer protections laws. Moreover, Congress should avoid any public policy initiative that adversely impacts older and sicker New Yorkers who are not yet eligible for Medicare, Superintendent Mills concluded.


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