Legislation will Help Control Costs and Makes Insurance Companies More Accountable
(ALBANY, NY) Senator Dale M. Volker (R-I-C, Depew) today announced that the State Senate last week passed legislation (S.8354-B), that offers a comprehensive approach to reforming health insurance and assist in controlling costs.
"This legislation is a major health care reform initiative that places the focus on the patient and moves towards more accountability on insurance companies," said Senator Dale M. Volker. "My focus continues to be making health care more accessible and affordable for families and this complements existing health care programs that have assisted tens of thousands of New Yorkers who are uninsured and underinsured throughout the state."
The bill offers significant changes in health insurance in a number of key areas.
Medical loss ratios -- Under the measure, the medical loss ratio would be raised from 75 to 80 percent for the small group market, requiring that at least 80 cents of every premium dollar be used to pay for health care services. The higher ratio is an important way of ensuring that a greater amount of the premium dollar is returned in health care benefits as opposed to administrative overhead costs or profits for the price sensitive small group market. The bill also establishes clear definitions and standards for calculating medical loss ratios. The change in the medical loss ratio is intended to discourage miscalculation of minimum loss ratios.
The bill further strengthens certification requirements, by requiring insurers to affirm, under penalty of perjury, that their rate filing was prepared in accordance with generally accepted actuarial principles.
Prior approval -- ‘two strikes’ -- The measure would reinstate prior approval for insurers who "materially misrepresent" their medical loss ratios two consecutive years. Prior approval would then take effect and be in place for up to three years. The component is intended to penalize any insurer who deliberately play games and misrepresents their loss ratios to the insurance department.
Network issues -- The legislation prohibits health insurers from charging a patient higher nonparticipating rates for hospital services in a participating hospital, even when the physician performing the service may be out-of-network. As long as a patient is being treated in a participating hospital, he must be charged the lower in-network rates for the hospital services he receives. Similarly, if the physician is in-network but the hospital is out-of-network, the patient must be charged in-network rates.
Prompt payment -- The legislation reduces the required time from 45 days to 21 days that an insurer must pay claims to health care providers when the claim is submitted electronically. Claims that are submitted in written form would remain unchanged, at 45 days. By reducing the time for electronic claims filing, the state is providing an incentive for providers to submit claims electronically, and offers the additional benefit of ensuring that local health care providers will receive their reimbursements in a more timely fashion.
During the last week of session, the Senate also passed legislation (S.8357) that authorizes new short term health insurance policies (up to 2 years) for young adults ages 19-26 who have lost coverage under parents’ policies and are otherwise not eligible for coverage. In most cases, they are recent college graduates. The policies are expected to cost approximately $100 per month, upstate. The bill was also passed in the Assembly.
"What better way to assist our young people with health insurance that is affordable and of high quality," said Senator Volker. "Currently young adults have limited options, mostly due to costs, when they make their health insurance decisions. Coverage through COBRA, individual coverage through the Healthy NY program, or a direct pay standardized contract, are simply too expensive for young adults as they begin their careers. Our legislation addresses this problem with a low-cost alternative that is both affordable and accessible."
The policies will provide a standard level of provider office care, hospital services and some ancillary services. In the 2007-2008 budget, the legislature allowed health insurers to offer policies that provided coverage to young adults through age 25 on their parents’ family policies.
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