Senate Democrats Oppose GOP Effort to Reduce Soaring Health Care Costs for Small Businesses, Taxpayers

Dean G. Skelos

April 03, 2009

Amendment would have rolled back new Democrat health insurance tax, new assessments that will lead to higher premiums

Senate Democrats today rejected a Republican-sponsored amendment that would have reduced skyrocketing health care costs in New York, ensuring that affordable health coverage will continue to remain out of reach for many small businesses, New Yorkers and their families.

The amendment would have rolled back the Democrats’ ill-advised “health insurance tax,” approved last month as part of the so-called “Deficit Reduction Package” (DRP). The $240 million increased assessment on insurance companies raised the cost of health insurance premiums for families, individuals and businesses to unprecedented levels. The tax hike was passed as a result of unanimous Democrat support.

The Democrat-backed “health insurance tax” will impact New Yorkers from every corner of the State by raising the cost of both individual and family health insurance coverage, in some cases up to $200 more a year.

According to the New York State Insurance Department, small business health premiums have already increased an average of 13.5% annually since 2000.

“At a time when the Federal government and many States are seeking to find innovative ways to make health care insurance more affordable, Governor Paterson and the Senate Democrats have maintained the status quo and hiked health care taxes even though New Yorkers can’t afford it. Today, given the opportunity to rescind these dangerous new taxes, they have refused to do the right thing,” Senate Republican Leader Dean G. Skelos said.

“Our amendment would reduce health care costs and benefit every family in New York State,” said Senator Kemp Hannon (R,C,I-Garden City), the ranking Republican on the Senate’s Health Committee.

In addition to defeating the roll back of the health insurance tax, Senate Democrats blocked a move by Senate Republicans to do away with a number of new assessments that will increase premiums and negatively affect a number of rural and community hospitals throughout New York, including Albany, Syracuse, Suffolk County and the North Country.

The GOP amendment would have eliminated the new HCRA surcharge on patient services from 8.95% to 9.63%, as well as a new $107 million tax on for profit HMOs.

In total, the new insurance taxes in the Budget amount to more than $801 million, which will significantly increase every single health insurance premium written in New York State next January.

“The high cost of providing health insurance to employees is a primary concern of individuals and small businesses alike,” said Senator James L. Seward (R-C-I, Oneonta), ranking Republican on the Senate Insurance Committee. “By voting against the amendments offered by senate Republicans today, the Democrats effectively raised the health insurance rates for families, individuals and businesses across the state by as much as $400 a year in upstate New York, and $700 in New York City. All this will do is increase the uninsured in New York.”