State Senator Suzi Oppenheimer (D-Mamaroneck) today praised a new plan introduced by Senate Democrats to improve health care in under-served communities, stimulate local economies by helping startup businesses obtain health insurance and reduce the soaring costs of health care premiums by returning regulation of Health Maintenance Organization (HMO) rates to the State Insurance Department.
The Westchester lawmaker noted that HMO profits nearly doubled between 2001 and 2005, from $672 million to $1.3 billion, while HMO payment reimbursements decreased. At the same time, HMO premiums increased dramatically, outpacing increases in medical payments by more than $1 billion.
"My colleagues and I are simply asking the health care industry to do their part by reinvesting a tiny portion of its wealth to benefit working families and others currently falling through the health care safety net," Senator Oppenheimer said. "Frankly, it seems unfair and unconscionable that poor New Yorkers die each day from treatable conditions while HMOs rake in enormous profits."
TheSenate's Minorityproposal calls for the creation of two new funds – the Community Health Care Investment Fund and the Health Care Entrepreneurial Stimulus Investment Fund – with each fund receiving $35 million to be paid by HMOs based on their percentage of profits.
An HMOs profit investment obligation to the program would be based on its degree of profitability relative to other insurance companies’ profit margins.
Senator Oppenheimer said the proposal sprang from the Senate Democrats’ Task Force on Health Disparities. The initiative, which convened four roundtable discussions around the State between December 2005 and June 2006, received input from concerned consumers, health professionals, advocates, and academicians.
"It should come as no surprise that our poorer neighborhoods suffer unmet health care needs," said Senator Oppenheimer. "According to a report released by the New York City Departments of Health and Mental Health, more than 4,000 deaths would be prevented if the mortality rates in the poorest neighborhoods were lowered to the rate found in the wealthiest neighborhoods."
She added, "To me, few statistics are more disheartening than the fact that 400,000 of our children go without health care coverage today."
The New York State Community Health Care Investment Fund would be administered by the Department of Health. It would provide grants to eliminate health disparities identified by the Federal Center for Disease Control, specifically in the areas of infant mortality, cancer screening and management, cardiovascular disease, diabetes, HIV/AIDS and immunizations.
A second part of the Senate Democratic proposal, the Health Care Entrepreneurial Stimulus Investment Fund, would provide grants to startup entrepreneurs and to laid-off workers seeking to start their own businesses who are without health insurance and who qualify and sign up for the Healthy New York program.
Since 1999, HMOs have been permitted to charge whatever premiums they choose, without the approval of the State Insurance Department and with no requirement that rate increases be justified. The proposed legislation returns the regulation of HMO rates to the State Insurance Department. A measure would require public hearings before any rate increase of more than five percent is allowed.
"As part of a multifaceted approach to reforming New York’s health care delivery system, this law would drastically improve the health of our families, communities and small businesses," Senator Oppenheimer concluded. "These large, thriving health insurance companies have a moral responsibility to be part of the solution to New York’s health care crisis."