Consumer Advocates Praise Governor and Legislature for Passage of Health Insurance Rate Regulation Bill
Consumers will now have some protection for sky-rocketing insurance rates
Albany, NY – On Monday, the New York State Senate and the New York State Assembly passed a bill to control skyrocketing health insurance rates. The legislation will reinstate a system known as “prior approval,” that will mandate the State Department of Insurance to reject or modify any health insurance industry premium hikes on their policy holders if the proposed rate increase is unreasonable, excessive, inadequate or unfairly discriminatory. Citizen Action hailed the passage of the bill as a significant win to health care consumers.
“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,” said Jessica Wisneski, Legislative Director of Citizen Action of New York. “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.”
Between 2000 and 2007, health insurance premiums rose 81%, while real wages only increased by 11% in that same time period. The bill, expected to be signed by Governor Paterson, would require insurance companies to seek prior approval of the State Insurance Department when increasing premiums. It would also increase the mandated “Medical Loss Ratios” (MLR) and 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 bill raises the MLR to 82% for all markets, individual and small group, up from 75% for small groups and 80% for direct pay market currently.
“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,” Wisneski added.
Citizen Action of New York is a statewide membership organization with members and offices across New York State and is a co-founder of Health Care for All New York, a coalition of over 100 consumer and health advocacy organizations statewide.
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