Senator Serrano Announces Support Of Legislation Designed To Close Health Care Gap

José M. Serrano

March 22, 2007

State Senator José M. Serrano (D-Bronx/Manhattan) today applauded new legislation designed to improve health care in medically under served communities, reduce the costs of health care premiums and stimulate local economies by helping start-up businesses obtain health insurance.

"I am very happy to support this bill, which was introduced by my SenateMinority colleagues. It is time for HMOs, who have benefited from rate deregulation, to play a more active role in the health care of their customers," Senator Serrano said.

The New York City lawmaker said that HMO profits rose from $672 million to $1.3 billion from 2001 to 2005, an increase of more than 90%. At the same time, he noted HMO reimbursement rates decreased, while premiums increased, outpacing increases in medical payments by more than $1 billion.

"Senate Democrats held a series of hearings throughout the State between December 2005 and June 2006. The report from the Senate Democratic Task Force in Health Disparities heard from health care professionals, concerned consumers and advocates, academicians and concerned consumers. If we use a small fraction of these profits earned by HMOs, we can make a sound investment in affordable health care for working families," Senator Serrano said.

Two new funds would be created by the Democratic plan -- the Community Health Care Investment Fund and the Health Care Entrepreneurial Stimulus Investment Fund. Both would receive $35 million to be paid by HMOs based on a percentage of their profits.

Administered by the Department of Health, the New York State Community Investment Fund would be administered by the Department of Health, and give grants that would address such issues as infant mortality, cancer screening and management, cardiovascular disease, diabetes, HIV/AIDS and immunizations.

The Health Care Entrepreneurial Stimulus Investment Fund would provide grants to start-up entrepreneurs and to laid-off workers seeking to start their own businesses but are without health insurance and who qualify and sign up for the Healthy New York program.

Despite low-income New Yorkers dying from conditions that are treatable, and nearly three million New Yorkers without health insurance, HMOs continue to boost their premiums far beyond what is necessary. Senator Serrano said the Democratic plan would return regulation of HMOs to the State Insurance Department. HMOs, which have controlled their rates since 1999, would have to undergo public hearings if a rate increase of more than five percent were requested.

"This is a new era in our State’s history, a time where everyone has a chance to learn, succeed and be healthy. I hope my Senate Republican colleagues, who certainly have expressed opinions about the importance of health care in the past few days, will adopt our proposals," Senator Serrano said.