Package Includes Proposals to Extend the Availability of COBRA Coverage for New Yorkers Who Lose Their Jobs and to Insure Dependents Up to Age 29

Other Proposals Will Make Insurance and Needed Health Services More Accessible

Governor David A. Paterson today announced legislation that will introduce several new initiatives to make health insurance more affordable and improve access to health care for more New Yorkers. The four bills submitted to the Legislature will: (1) extend the period of time for the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage from 18 to 36 months; (2) permit families to cover their young adult dependents through age 29 under their job-based insurance; (3) require health insurers to get approval from the Superintendent of Insurance before increasing premium rates; and (4) enact a series of managed care reforms to protect the ability of consumers who have health insurance to timely access necessary health services.

“These reforms will make health insurance more affordable for everyday New Yorkers. More than two million of our residents do not have health insurance, partly because of the high cost of coverage for businesses, individuals and families,” said Governor Paterson. “We must take the necessary steps to improve our broken health care system. By making insurance coverage more accessible, we bring people into the system before they need emergency treatment, reducing the overall cost of health care to the entire State.”

The Governor‘s proposals include:

* Expand COBRA for Employees to 36 Months: This bill will increase the period for employees who lose their jobs to continue their health insurance under COBRA from 18 to 36 months. Under COBRA, workers who lose their jobs can continue purchasing group health insurance provided by their former employers’ group health plans for limited periods of time under certain circumstances for themselves and their families. COBRA generally applies to employers with 20 or more employees, while the State’s “mini-COBRA” law requires that smaller employers – those who have fewer than 20 employees – offer the same continuation coverage. This allows employees to maintain health insurance at a lower cost than if they had to buy it themselves on the open market. The Governor’s proposed legislation will allow New Yorkers who lose their jobs to extend their health insurance coverage for a longer period of time, which is particularly important in the current economy with its record high level of unemployment.

* Insure Dependents Through Age 29: This bill, outlined by the Governor in his State of the State address, will require that insurers allow unmarried children through age 29 – regardless of financial dependence – to be covered under a parent’s group health insurance policy. Young adults ages 19 to 29 represent 31 percent of uninsured New Yorkers. They often become ineligible for coverage under their parents’ policies at age 19 or upon high school or college graduation, find themselves in entry-level jobs that do not provide employer-based health insurance, and cannot afford to pay premiums for individual insurance policies – which are much more expensive than group policies. Under the bill, premiums would be paid for by families, not employers, and would cost less because coverage is under group policies rather than individual policies.

* Prior Rate Approval: This bill will require prior approval of health insurance rates by the Superintendent of Insurance. Since 1996, New York has operated under the “file and use” system, under which health insurers can increase premium rates for policyholders without first having to justify the increases to the Insurance Department. The bill will reinstate the prior approval process, giving the Insurance Department the ability to approve rate changes before they are put into effect, and providing better balance between consumers and insurers in the rate setting process.

* Managed Care Reform: This bill will implement reforms that help consumers receive the care they need and cut some of the red tape that results in inappropriately delayed or denied claims. Some of the protections that will benefit consumers under the proposal are:

o Prohibiting insurers from treating an in-network provider as out-of-network simply because the referring provider was out-of-network;
o Establishing minimum standards to ensure that non-HMO’s have an adequate network of providers to meet the patient’s needs;
o Extending current protections for consumers in HMOs to consumers in “HMO look-alike” plans – health plans that operate the same as HMOs but are not licensed as HMOs, such as “exclusive provider organizations” or EPOs;
o Reducing the prompt-pay timeframe from 45 days to 15 days for electronically submitted claims so doctors and hospitals are paid more quickly;
o Limiting health insurers’ ability to make administrative or technical denials of payment for otherwise medically necessary services;
o Reducing the time insurers have to review requests for post-hospital care;
o Deeming a claim to be approved (rather than denied) when a health insurer fails to meet certain claim review timeframes;
o Extending protections to doctors and hospitals when health insurers seek to recover alleged overpayments. The protections include basic notice and an opportunity to challenge the insurers’ overpayment recovery efforts.

Insurance Superintendent Eric Dinallo said: “The Governor’s legislative package includes substantial reforms that will have a real impact on New Yorkers, allowing those who currently cannot afford health insurance to obtain coverage. In addition, these proposals will benefit businesses which pay for group coverage for their employees.”

Commissioner of Health Richard F. Daines, M.D., said: “I commend Governor Paterson for his commitment to increasing access to health insurance, which gives individuals access to consistent primary and preventive care and helps them avoid chronic disease and avoidable hospitalizations.”

The legislation announced today builds upon other initiatives aimed at increasing the availability and affordability of health insurance. In March, Governor Paterson signed into law his Program Bill to help New Yorkers who lost their jobs at small businesses take advantage of a COBRA subsidy made available under the federal American Recovery and Reinvestment Act (ARRA). In addition, the 2009-10 enacted budget eliminated certain barriers to enrolling in public health insurance coverage such as face-to-face interviews, finger imaging, and asset tests, and authorized the Department of Health to seek federal support for expanded coverage for low-income adults. Moreover, as of September 1, 2008, all of New York’s uninsured children became eligible for moderate or no-cost health care coverage under Child Health Plus.