MEMORANDUM IN OPPOSITION

Date: November 11, 2009

Proposal to increase the Patient Services Assessment

The Employer Alliance for Affordable Health Care is a coalition of more than 3,000 small business owners and sole proprietors who 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. Governor David Paterson and the New York State Legislature are considering an increase in health care taxes by implementing a hike in the Patient Services Assessment fee to offset the state budget deficit. New York’s health care consumers already pay MORE THAN $4.2 billion in taxes on their health coverage. Hiking the PSA is the ultimate mandate, adding to the cost of health care without adding any benefits or health care services.

Any increase to health care taxes, whether they are called “fees,” “assessments,” or “surcharges,” get passed along to consumers – in this case, New York’s small and medium-sized businesses owners and their employees. Such increases produce a ripple effect of increased premium costs that eventually result in some businesses dropping their health insurance coverage altogether.

The Employer Alliance for Affordable Health Care opposes any additional increases to health care taxes for the following reason:

• The Patient Services Assessment already increased once this year, by $126 million in the 2009-2010 NYS Budget. New York State Department of Budget, 2009
• New Yorkers already pay 26% more for health care than the national average. Any increase in health care costs, whether it is through additional fees, taxes, surcharges or assessments, is ultimately passed along to consumers. Centers for Medicare and Medicaid Services, 2000
• Small businesses, which would be hardest hit by this surcharge, make up 98% of businesses in New York State and employ more than 50% of the private sector workforce. “Governor Paterson Announces Creation of NY Small Business Task Force,” 2009
• Small employers pay an average of 18% more in health insurance costs. From 2000 to 2006, the percentage of the population with employer-based health insurance dropped by 4.5%. NFIB - Rising Costs for Health Care: Implication for Public Policy 2009

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.