New York

Governor Proposes Insurance Reforms, Medicaid Cuts, and New Taxes

Feb. 5, 2010 – Governor Paterson has released a budget proposal to close an $8.2 billion budget deficit that includes insurance market reforms, $1 billion in savings from the Medicaid program, and various other cost saving measures. The Governor has proposed insurance market reforms that would require health insurers to spend at least 85% of premium revenue on medical costs retroactive to 2010 premium rates currently in effect. He would also require the Department of Insurance to approve health insurance premium rates prior to use or sale, including public hearings for proposed rate increases exceeding 10%. The budget proposal decreases Medicaid spending by $1 billion through reduced reimbursements to health care providers, changes to drug purchasing programs, and reduced treatment benefits for potentially preventable hospital readmissions. The budget also includes increased cigarette taxes and new taxes on sugared beverages, which collectively would generate $650 million in the 2010-2011 fiscal year and $1.1 billion the following fiscal year.

Republicans Win Races in New Jersey, New York, and Virginia

Nov. 5, 2009 – In an off-year election with few offices up for election, Republicans won various state offices in New Jersey, New York, and Virginia. In New Jersey, Republican Chris Christie beat incumbent Democratic Governor Jon Corzine. In New York City, Republican/Independent Mayor Michael Bloomberg won re-election. In Virginia, Republicans took the state with the election of Robert McDonnell for Governor, Bill Bolling for Lieutenant Governor, Ken Cuccinelli for Attorney General, and an increase in seats in the House of Delegates.

Governor Enacts Health Care Bills Following Political Upheaval

Aug. 5, 2009 – After political unrest in June, with the defections of Senators Espada and Monserrate to the Republican Party halting work in the state Senate, it was unclear whether four health care bills championed by Governor Paterson would be addressed. Following extended negotiations which included changes to the Senate leadership, the two Senators returned to the Democratic Party, allowing the Senate to finish work on legislation. On July 29, the Governor signed three of his four health care bills into law. The first bill, the Governor's "Managed Care Reform" bill, makes changes to a number of managed care processes that include limiting the ability of plans to recoup overpayments to providers and reducing the timeframe for payment of claims to providers. The second bill expands COBRA continuation coverage from 18 to 36 months. The third bill requires insurers to cover unmarried children through age 29 under a parent's group policy regardless of whether the child is financially dependent on the parent. The Governor's fourth bill, that would have required health insurance plans to receive prior approval of rates for individual and small group products, allowed the Insurance Department to modify rates, and required a medical loss ratio of 85 percent for individual and small group products, failed to pass the Legislature.

State Releases Report Analyzing Impact of Four Health Reform Proposals

Aug. 5, 2009 – The New York Departments of Health and Insurance have released a study conducted by the Urban Institute estimating the cost and coverage levels of four health reform proposals. The four proposals include: 1) "Public-Private Partnership" that expands public program eligibility, merges the small group and individual markets, includes individual and employer mandates, provides individual coverage subsidies, and includes a public plan option, 2) "Public Health Insurance for All," a single payer plan, 3) "New York Health Plus" that gives residents the option to enroll in Family Health Plus regardless of income and requires employers to offer coverage or pay a 10 percent of payroll fee, and 4) "The Freedom Plan" that includes premium subsidies for individuals and small groups and premium flexibility for age and health status. The study found that the "Public-Private Partnership" proposal would most cost-effectively reduce the number of uninsured New Yorkers; it would cover 94 percent of residents at a cost of roughly $1 billion.

Politics Stall Movement of Health Care Legislation

June 15, 2009 – With two weeks left in the scheduled legislative session, political upheaval in the State Senate has halted legislative action in New York. On June 8th, Senators Espada and Monserrate defected to the Republican Party, shifting the 32 member Senate majority to Republican control. Since then, confusion has ensued, party loyalty has waivered, legal challenges have been brought, and control of the Senate remains unresolved to date.

Prior to the Senate unrest, four pieces of health care legislation championed by Governor Paterson were moving through the Legislature. The first bill would require health insurance plans to receive prior approval of rates for individual and small group products before they go to market, allow the Insurance Department to modify rates, and require a medical loss ratio of 85 percent for individual and small group products. The second bill, the Governor¿s "Managed Care Reform" bill, would make a number of changes to managed care processes such as limiting the ability of plans to recoup overpayments to providers and reducing the timeframe for payment of claims to providers. The third bill would expand COBRA continuation coverage from 18 to 36 months and the Governor's fourth bill would require insurers to cover unmarried children through age 29 under a parent's group policy regardless of whether the child is financially dependent on the parent. The unresolved political situation in the Senate has stalled these and other pieces of legislation. The Legislature will need to return and resolve some legislative issues, but it is unclear if they will address these pieces of health care legislation when they return.

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