Late last night, the New York State Senate and Assembly passed legislation to reinstate regulations on insurance companies’ raising their rates.
The legislation, called “prior approval,” requires health insurance companies to get approval from the State Department of Insurance before raising rates on individual and group plans.
Between 2000 and 2007, health insurance premiums rose 81%, while real wages only increased by 11% in that same time period.
The bill is expected to be signed by Governor Paterson.
Another provision within the bill would force companies in New York to spend more of each premium dollar on medical payments instead of other costs like advertising or CEO bonuses.
The amount that insurance companies spend on actual medical payments is called the medical loss ratio (MLR). This bill increases the MLR to 82% for all markets, individual and small group, up from 75% for small groups and 80% for direct pay market currently.
We, along with our allies in Health Care for All New York, have worked tirelessly during this legislative session to get this regulation passed.
Here’s what Citizen Action’s Legislative Director, Jessica Wisneski, had to say:
Congress and the President did their job passing the new federal health care law earlier this year and now New York State government is doing their job to control excessive insurance rate increases. The rate hikes we’ve seen in recent years are breaking the budgets of our families and small businesses across New York. That’s why Citizen Action fought so hard for passage of prior approval. This new law will allow the state government to protect consumers who cannot stand up to health insurers on their own. Senate Insurance Committee Chair Neil Breslin should be praised for championing this issue for the people. We applaud him and other legislators who voted for the bill as well as Governor Paterson for reinstituting rules that were dismantled under Republican rule. The new rules on insurance companies will go a long way to curtail the sky-rocketing cost of health insurance in New York.