Enacts the New York state community health care investment fund act

Section 2 Legislative Intent

Section 3 Amends the State Finance Law by adding two sections 99q the New York State Community Health Care Investment Fund and 99r the New York State Health Care Entrepreneurial Stimulus Fund.

Section 4 Provides that any health maintenance organization certified under Article 44 of the Public Health Law or licensed pursuant to the state Insurance Law shall be required to deposit moneys into the New York State Community Health Care Investment Fund. Exempts not-for-profit health maintenance organizations from the requirement to contribute to the fund. Also establishes the amounts to be deposited into each fund.

Section 5 Establishes the New York State Community Health Care Investment Fund Council consisting of 13 members.

Section 6 amends the Public Health Law to establish the New York State Community Health Care Investment Grant Program.

Section 7 Amends the Labor Law to establish the New York State Entrepreneurial Stimulus Investment Grant Program.

Section 8 Effective Date

Justification

The provision of health care in New York must be affordable, accessible and address the multifaceted needs of its diverse population, from preconception planning through the end of life. The Legislature also finds that many constituencies play an important role in the State's health care infrastructure: consumers, health care professionals, communities of faith, state and local governments, businesses, insurance companies, community based organizations, home care agencies, school based health clinics, nursing homes and hospitals.

Health care in New York State also faces many challenges. Our State is home to many world-class medical institutions and research centers. According to the United Health Foundation 2006 "America's Health Rankings" New York has the 4th highest per capita spending on public health in the nation, a low rate of motor vehicle deaths and a low rate of cancer deaths. However, the health care challenges in New York State include a high incidence of infectious disease, limited access to prenatal care and a low high school graduation rate. Twenty percent of the State's children under the age of 18 live in poverty. Furthermore, the state's overall rank among the rest of the country decreased from 26th place in 2005 to 29th in 2006. Despite high per capita spending on health ($316 per person) almost three million of its residents do not have health insurance. Not surprisingly, health disparities persist in low-income cities and neighborhoods where racial and ethnic minorities comprise a majority of the population. According to a report released in 2004 by the New York City Department of Health and Mental Health, "more than 4,000 deaths would be prevented if the all-cause mortality rate in the poorest neighborhoods were lowered to the rate in th e wealthiest neighborhoods.

Against this backdrop of high public health spending, significant health care disparities experienced by ethnic and racial minorities and approximately three million uninsured people in New York State, HMO profits in New York State have soared in recent years while costs for Members have risen and reimbursement for health care providers has fallen. Premium increases statewide have increased about 20% and revenues have risen from $14.5 billion in 2001 to $17.4 billion in 2005. In fact, premium rate increases outpaced medical payments from 2001-2005 by over $1 billion as New York's HMOs' profits climbed 93% from $672 million to $1.3 billion. HMOs' administrative and claims adjustment costs went up by 24% from 2001-2005 and average revenue per member increased an average of 8.6% annually. During the same period, enrollments declined 14%, provider reimbursements trended downward from 85..3% of every dollar to 81.7% and out-of-pocket-costs for Members increased by 7.7%.

The Legislature additionally finds that HMOs that conduct business in New York State have a responsibility toward improving the health status of the residents of this State and should assist in providing revenue to support critical community health and economic development needs.

Prior legislative history

S.4795a of 2007 04/23/07 Referred to Finance

Fiscal implications for state and local governments

Unknown

Effective date

This act shall take effect immediately.