|
|
 |
|
|
|
Senator Bruno unveiled the Senate's plan to make health insurance more affordable at a Capitol news conference. |
Comprehensive Plan Would Significantly Reduce The Number of Uninsured New Yorkers
Tuesday, February 24, 2004
Senate Majority Leader Joseph L. Bruno and Senator James L. Seward (R-C-I, Oneonta), today unveiled a comprehensive plan to make health insurance more affordable and to provide coverage for hundreds of thousands of New Yorkers who are uninsured. The centerpiece of the Senate plan is a health insurance tax credit that would encourage more small businesses to provide health insurance for their employees and would make health insurance more affordable for individual purchasers.
The Senate is proposing a 43 percent tax credit that, when combined with the existing health insurance tax deduction, would result in an effective tax credit of 50 percent for health insurance costs. The credit would be phased in over ten years and, when fully implemented, would result in an investment of almost $1.6 billion to provide health insurance coverage for hundreds of thousands of uninsured New Yorkers.
"This is the most far-reaching measure we�ve ever put forward to reduce the number of uninsured people in this state, which is currently about three million people," Senate Majority Leader Joseph L. Bruno said. "This is a very effective plan that will ensure people get the health care they need, that businesses and individuals will be able to afford health insurance coverage and that state and local governments will save money. When you consider that New York spends about $15 billion to pay for health care for the uninsured, and that many uninsured people are low-income workers at small firms, our plan is right on target. I commend Senator Seward for his hard work in developing this proposal."
In addition, the Senate plan includes making low-cost "Freedom Policies" available in conjunction with tax-free health savings accounts; expanding the Healthy NY program so more individuals and small businesses can participate; and making other insurance reforms to stabilize or reduce the cost of health insurance.
"Many employers are dropping coverage after five straight years of double digit premium increases and a full 100 percent increase in costs since 1999," Senator Seward, Chairman of the Senate Insurance Committee, said. "It is estimated that for every 1% increase in insurance premiums nationally, 400,000 more people may become uninsured. That figure translates to about 30,000 more uninsured New Yorkers. With our plan, the Senate is taking a comprehensive, multifaceted, approach to ensure that New Yorkers can afford health insurance, that they have choices and access to the care they need for themselves and their families."
It is estimated that approximately 60 percent of small businesses in New York State offer their employees health care coverage. Employers who do not offer coverage cite the high cost as the primary reason for not providing coverage.
The current state deduction for small business health costs is equivalent to a seven percent tax credit. The Senate plan would add an additional 43 percent tax credit that would be phased in over the next ten years. In the first year, a nine percent credit would save businesses $50 million. When fully implemented, the total effective 50 percent tax credit would save small businesses $1.56 billion.
"The skyrocketing cost of health insurance forces many businesses to face the difficult decision of shifting more of the cost of coverage to employees or dropping coverage entirely," Senator Bruno said. "The Senate�s plan would significantly reduce the number of uninsured New Yorkers through a combination of tax advantages, government initiatives and commercial insurance market reforms that would bring health insurance within the means of all small businesses and every New Yorker."
About three million New Yorkers are uninsured. New York is expected to spend almost $15 billion in the 2003-2004 fiscal year to pay for the cost of providing health care for the uninsured and for programs to provide health care coverage. Local governments will spend more than $6 billion. These figures do not include billions of dollars the state spends to support other aspects of the health care delivery system or the billions of dollars paid by individuals and businesses for medical care and health insurance.
The Senate recommendations are based on a report by the Senate Insurance Committee entitled "The Health Insurance Market in New York State, Strategies for Affordable Coverage." The report was developed following public hearings held last year.
The Senate�s recommendations include:
> An effective tax credit of 50 percent for small businesses with not more than 50 employees and who has an earned net income of not more than $290,000, that provide health insurance to their employees; as well as sole proprietors and those who purchase their own insurance. Six states, Kansas, Kentucky, Maine, Massachusetts, Oklahoma and Oregon, currently provide a similar tax credit.
> Authorizing HMOs and insurers to offer new "Freedom Policies" that would cost about 40 percent less than existing health care policies, have higher deductibles and would be coupled with new Health Savings Accounts (HSAs). HSAs are authorized by the recently enacted federal Medicare Reform Act and allow tax free contributions and expenditures for medical purposes.
> Expanding participation in the Healthy NY program by increasing eligibility for the program from 208 percent to 250 percent of the federal poverty level and allowing individuals above 250 percent of the poverty level to buy into the program at the full, unsubsidized premium.
-- Providing $31 million in additional funds to the "stop loss pool" to stabilize premiums in the direct pay and small group insurance markets. The added funds would address extremely high cost claims above $500,000 and would insulate policyholders from claims which have a disproportionate impact on premiums.
-- Makes additional commercial market reforms to provide greater choice and flexibility in health insurance product design and pricing.
NYS Senate Report on The Health Insurance Market In New York State Strategies for Affordable Coverage
[BIOGRAPHY] [DISTRICT MAP] [PHOTO GALLERY] [LEGISLATION] [CONSTITUENT SERVICES] [YOUR OPINION COUNTS] [GUESTBOOK] [PRIVACY POLICY] [SENATE INSIDER] [CONTACT INFO] [HOME/NEWS]