Senate Bill S9192

                                 
BILL NUMBER: S9192

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the general obligations law, in relation to health
insurance and provider divestment

 
PURPOSE:

To prohibit monopolistic behavior between insurance companies over
health care providers

 
SUMMARY OF PROVISIONS:

Section 1 amends the General Obligations Law by adding a new section
-339 to prohibit monopolistic behavior of insurance companies over
health care providers.

Subdivision 1 sets forth the definitions to be used in this section as
follows: (a) Health Insurance Company, (b) Health Care,provider, and (c)
Indirect Control
              

Subdivision 2(a): It shall be unlawful for any person or entity to both
directly or indirectly own, operate, control, or direct the operation of
the whole or any part of a health insurance company and a. health care
provider or any combination thereof.

Subdivision 2(b): It shall be unlawful for any person or entity to both
directly or indirectly own, operate, control, or direct the operation of
the whole or any part of a health care provider and a health insurance
company or any combination thereof.

Subdivision 3: No later than three years after the effective date of
this section, any person or entity in violation of subdivision 2 of this
section shall divest from such health insurance company and health care
provider.

Subdivision 4: The Attorney General may bring a civil action against any
person or entity in violation of this section and may recover the
following:

(a) a civil penalty of $10,000 per day; and

(b) costs and reasonable attorneys' fees.

Section 2 sets forth the effective date which is immediately.

 
JUSTIFICATION:

When an insurance company owns a healthcare provider, it can create
serious conflicts of interest. Too often, the company prioritizes
profits over patient care, reduces patient choice and access, and
engages in anticompetitive practices like steering patients to affil-
iated clinics. This business model often leads to increased administra-
tive burdens for both providers and patients and can leave non-affiliat-
ed providers trying to compete in a marketplace that is essentially
rigged for the insurance company and its providers.

This is because when healthcare providers, insurers, and other entities
merge, they gain substantial market power. This consolidation can reduce
competition and lead to monopolistic practices. With fewer competitors,
such "vertically integrated" organizations can increase prices for
services, medications, and insurance premiums, placing a heavier finan-
cial burden on patients.

In addition, this model often limits whom doctors can refer patients to,
based on an insurance company's preference for medical providers that it
owns or that are in its network. This inherent conflict for providers
owned by insurers begs the question: "Will my doctors fight as hard for
the best outcome for me when they are dealing with the insurance company
that they ultimately work for?"

UnitedHealth Group owns UnitedHealthcare, the largest insurer in the
United States. In the Hudson Valley, it acquired health care provider
CareMount Medical in 2022, followed by Crystal Run Healthcare in 2023.
Prior to that takeover, Crystal Run went on a shopping spree of its own,
gobbling up numerous medical providers in the region.

The final outcome of these consolidations is obvious: If there are fewer
health care providers, patients will have fewer choices. If there is
less competition, prices will eventually increase. Health care workers
will also have fewer options for where they can work.

This bill prohibits an insurance company from owning a health care
provider or a health care provider from owning an insurance company.  It
is a critical step in preventing the corporate consolidation of health
care that results in a reduction in the quality and availability of
care.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.