Affordable Health Insurance in New York

[Welcome Kaiser Network readers!]

Governor Patterson wants to make health insurance more affordable by requiring health insurance carriers to seek approval from the state before raising premiums.

Sounds good, right?

Not so fast.

New York already has some of the highest premiums in the country thanks to government meddling. Residents of New York can buy health insurance without medical underwriting. This means folks who are healthy get the same kind of offer as those who are really sick.

New York also has community rating which is a fancy way of saying everyone in a particular area pays the same for health insurance without regard to any pre-existing health conditions. In other words, healthy people pay the same as sick people.

And let's not forget that because of these mandates, only a handful of carriers even want to write business in that state. Less competition means fewer choices.

All of this adds up to some very high premiums.

Now Patterson want's to make it worse.

"This is basically a bill that seeks to impose much greater regulation of health insurance premiums," she said. "It's basically exerting price controls on health care. It ignores the underlying factors that are responsible for an insurance premium. It would only regulate the cost of premiums without regulating the cost of providers, hospital cost."

Greater regulation on premiums means more carriers will simply withdraw from the market, resulting in even higher premiums.

Of New York's uninsured, nearly one in three is between the ages of 19 and 29. Paterson's proposal would allow families to cover children up to age 29 under insurance provided by their employer

If children are still living at home at age 29 they are never going to leave. At some point it is time to cut the apron strings and suggest they start acting like an adult. Covering children under an employer plan is usually much more costly (at least in Georgia as well as most other states) than purchasing individual coverage in the open market.

Under the proposal, families would pay the premiums instead of employers, but it would cost less under group policies than if the young adult took out an individual policy.

Maybe so in NY, but not so in most states.

I have quite a few clients who have taken their children off an employer plan and put them on individual policies. I have children as young as 2 on policies that are half the cost of covering them under their parents group insurance plan.

The final proposal in Paterson's package would attack managed care to reduce bureaucracy that stands in the way of care and cut down on inappropriately delayed or denied claims. If an insurance company fails to meet a deadline for reviewing a claim, the proposal would require the claim to be approved.

The plan would also reduce the time insurance companies have to pay doctors and hospitals to 15 days instead of 45 days.

These may seem noble but consider this. If claims are paid just to meet an artificial time limit, and there is no other justification for paying the claim, the result is higher premiums.

Managed care and giving carriers time to adequately review claims reduces the number of superfluous claims which hold down premiums. Of course the flip side is for carriers to increase staff to process claims much quicker. Increased staff means higher costs which results in higher premiums.

Providers have regulated reimbursement and Medicaid and Medicare have built in ceilings, so when you have that, but you have one sector that is exclusively free market, you take the air out of the balloon."

If New Yorkers think health insurance is costly now, just wait until Patterson and company get through with it.

More stupid government tricks.