MEMORANDUM IN OPPOSITION

Date: May 2010

Bill: A10450-A (Menge)
Act to amend the insurance law in relation coverage for the cost of certain infant and baby formulas.

The Employer Alliance for Affordable Health Care is a grassroots coalition of more than 3,000 sole proprietors and small and medium-sized business owners who represent more than 150,000 working New Yorkers. Our members believe that everyone should have access to basic, affordable health insurance. We oppose health insurance mandates that increase premium costs and decrease accessibility of basic, affordable health insurance. Bill A10450-A seeks to require every health insurance policy that includes prescription drug coverage to include the cost of infant and baby formulas when prescribed by a physician as necessary for certain medical conditions.

WE OPPOSE THIS LEGISLATION FOR THE FOLLOWING REASONS:

• Since 1997, New York State has required health insurance carriers to cover the cost of amino-acid based formulas with a direct annual impact on premiums ranging from $3-$10 (Health Insurance Mandates in NYS, Nova Rest Consulting, May 2003). As minimal as that may seem, health insurance premiums continue to rise at astronomical rates and the impact of mandates such as this are cumulative.
• An actuary study conducted on similar legislation in the state of Maine determined that state’s mandate to cover infant formula did, indeed, have a direct cost impact on family and total premium costs of roughly 1%. At a time when premium payers are shouldering increases on average of 17%, it’s irresponsible to consider any additional cost-increasing measure.
• The current system allows private health insurers the option of using discretionary funds for a number of different options, including training, disease prevention programs or infant formula. Requiring coverage of different formulas will diminish a carrier’s ability to utilize this funding for other necessary and broad-serving programs.
• Studies have shown that a mother’s breast milk is often the best and safest alternative for infants suffering from a variety of medical conditions. Since increased access typically leads to increased utilization, it’s possible that expanded requirements regarding infant formula will result in individuals seeking the easiest, rather than the most effective food alternative.

For these reasons, the Employer Alliance for Affordable Health Care asks you to oppose this legislation.

The Employer Alliance for Affordable Health Care is a coalition of more than 3,400 employers and individuals from across New York, representing more than 200,000 working New Yorkers, committed to preserving quality affordable health care.