Authorizes the superintendent of insurance to phase in certain health insurance rate increases

BILL NUMBER:S2029

Title of bill

An act to amend the insurance law, in relation to permitting the superintendent of insurance to phase in certain increases in premiums for nonprofit medical and dental indemnity on health and hospital service corporations

Purpose/summary of provisions

The purpose of this legislation is to reduce the sudden financial burden to health insurance customers during rate increases by allowing the superintendent of insurance to phase-in the percentage amount of a rate increase which exceeds 15% over a six month period.

Specifics

Section 4308 of the insurance law is amended by adding a new subsection (k).

Justification

Health related costs continue to skyrocket. In Western New York, rate payers were hit with several double-digit health insurance premium hikes. For example, Blue Cross of Western New York, Inc. received a 20.1% rate hike increase and Blue Shield of Western New York, Inc. was granted a 22.8% increase. These increases have a detrimental effect on all policyholders, but especially those on fixed incomes. Such increase could force many senior citizens to cancel coverage.

In recognition of the Insurance Department's responsibility to insure financial solvency of health insurance companies and its statutory authority in setting rates, this legislation simply would allow the superintendent to phase-in the percentage rate hikes beyond 15% over a six month period. This authorization would give people and organizations time to adjust to dramatic increases over a period of time and to take appropriate financial measures to insure stability and coverage.

Fiscal implications

None.

Effective date

This act shall take effect immediately.