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S. 6385-A(Alesi)/A. 395-A(Morelle)

Healthy New York Waiting Period

Summary: The bill amends Insurance Law Section 4326  to eliminate the requirement  that a small business must not have offered health insurance for a 12 month period prior to application to qualify for the Healthy New York program.

Effective Date: January 1, 2009.

Last Action: Vetoed by the Governor on September 25, 2008 (Veto Memo #137).


The Healthy NY program, enacted as part of the Health Care Reform Act of 2000, makes standardized health insurance contracts available to qualifying small employers and to certain uninsured individuals. Healthy NY is designed to provide coverage for vulnerable small businesses and low income individuals without health insurance. The enrolled businesses and individuals pay monthly premiums for their coverage, while the state covers high cost medical claims by reimbursing health plans through reinsurance. Overall, this approach leverages State dollars to make health insurance more affordable than current market alternatives. Premiums for Healthy NY are generally 30% below existing small group premiums and 75% below premiums in the individual direct.

In general, the program is available to: (1) employers with fewer than 50 eligible employees where at least 30% of such employees are paid less than $30,000 annually; (2) sole proprietors whose gross household income is no more than 250% of the federal poverty level; or (3) individuals whose employers do not offer health insurance and whose income is no more than 250% of the federal poverty level.

Healthy NY coverage is available only if, for the 12 months preceding an application for the program, an individual did not have health insurance and his or her employer did not offer group health insurance. Requiring individuals or businesses to be uninsured for a certain amount of time to qualify for publicly-funded insurance is designed to prevent

the currently insured from dropping their coverage to enroll in publicly-funded insurance programs. This bill would amend the Insurance Law to eliminate the requirement for individuals and groups to be uninsured for 12 months preceding an application to be eligible for the Healthy NY program.

This bill has a laudable goal and one which is, in general principle, consistent with my Administration's initiatives to expand the accessibility of affordable health insurance. Indeed, the Legislature has joined with me in several initiatives that have enhanced access to public health insurance programs. However, this bill raises issues of concern that prevent me from approving it.

In particular, this bill would have an undetermined and significant impact on State finances. Initiatives with fiscal implications, especially at a time when the State is facing a large budget deficit, must be considered during the budget process, when the State projects revenues and considers initiatives in a variety of areas to determine where the State's resources are best spent.

Moreover, the Legislature has not included any additional funding for the enhanced access to healthy NY this bill provides. Given the downturn in the economy and increasing commercial health insurance rates, increased enrollment in Healthy NY is anticipated even without removing the 12-month eligibility requirement. If the program's enrollment reaches its annually estimated enrollment capacity, as determined by the available funding, the Insurance Department is required to suspend enrollment.

This bill would permit currently insured small businesses and individuals to drop their coverage and enroll in this low-cost program. As a result considering the lack of additional funding and the anticipated increase in enrollment, currently uninsured small businesses and individuals, who could have otherwise obtained coverage through Healthy  NY, would be precluded from participating in the program.

The bill is disapproved.                 (signed) DAVID A. PATERSON

Department of Financial Services


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