MEMORANDUM IN OPPOSITION

Slipped into the executive budget is a health insurance mandate that requires small business premium payers to underwrite early intervention services provided to certain insureds.  The Employer Alliance for Affordable Health Care, a coalition of nearly 3,500 employers statewide is committed to keeping health care affordable and thus opposes another health insurance mandate that in this case will shift state and county financial responsibilities to a limited number of already overstressed premium payers making it harder for working New Yorkers to maintain their access to affordable health insurance.

The amendment to the Early Intervention program inappropriately mandates payments for ineffective treatments
This proposal seeks to provide early intervention medical services with no limits, no quality control and reduced medical oversight.  Removing these controls opens the door for inappropriate expenditures and potentially fraudulent activity.  Compounding these concerns, the legislation specifically authorizes reimbursement for early intervention services even if the treatments are “not amenable to significant improvement” of the child.  Nowhere else in the health care system are premium payers expressly required to pay for treatments of dubious value. Additionally, the mandate intentionally and inexplicably removes cost and quality efficiencies by eliminating physician networks.  By abolishing networks, the program will fail to achieve a proper coordination of services and will lose potential cost savings - a critical concern to the management of this growing program.

New York’s largest businesses are exempt from this mandate – leaving small businesses to shoulder the costs of this expensive benefit
This proposal is inequitable because only a small portion of employers will be obliged to cover the services required under the mandate.  That is because nearly half of New York’s insured population is covered under a self-insured product and hence, is exempted from state mandates in accordance with the federal ERISA law.  As a result, this mandate falls squarely on small employers.  New York’s largest, most financially secure employers will have the option of skirting the provisions of this bill.

It is perplexing that while the executive has openly discussed his interest in establishing a universal health care program in New York, the administration would promote a mandate that will increase health care costs and put more New Yorker’s in jeopardy of losing insurance coverage.  For the third year in row, members of the Business Council of New York State have indicated that health care costs are their number one business concern.  Recent data is compelling: the source of New York’s chronically high uninsured rates rest in the declining number of businesses offering coverage and the chief reason for this decline is the lack of affordable health care.  New York is facing a health insurance crisis that demands legislative leadership and initiatives that will enhance access to insurance, not more mandates like this proposal.

Employer Alliance urges mandate reform

Instead of passing this mandate, we urge the Legislature to reappropriate $300,000 from the 2006-07 budget and pass implementing legislation to enact a health insurance mandate commission – similar to those already in place in twenty-six other states.  Such a commission will empower lawmakers by providing unbiased information to facilitate sound decision making on mandates.  Would it have been beneficial for lawmakers to know before they passed the mental health mandate bill last December, that the “cup of coffee” cost estimates advanced by the advocates actually totaled $100 million for small group coverage alone?  We think so. In fact, this gross underestimation reinforces our belief that every mandate should receive a thorough review from an independent commission before legislative consideration.

We understand that the counties and state are under tremendous fiscal pressures.  The rising cost associated with the Early Intervention program is just one of several areas where costs are consistently exceeding budgeted expectations.  However, merely off-loading the costs of these services – some admittedly suspect in nature – to a limited and shrinking base of premium payers is not the answer.  It will simply drive the cost of health care higher, increase the number of uninsured and ultimately, undermine New York’s economic recovery. 

For all these reasons, the Employer Alliance urges you once again reject this portion of A.4308-A/S.2108-A.