Requires health insurers to offer coverage of health care provided by out of network providers

Summary of provisions

This bill amends Public Health Law § 4403 and Insurance Law §§ 3217-e and 4306-d to require that every insurer offer, both inside and outside of the exchange, out-of-network coverage in at least one policy option and as an optional rider. It provides an effective date of January 1St next succeeding the date of enactment.

Justification

Across the state, individuals accessing insurance through the statewide health benefit exchange, "the New York State of Health," and outside of the exchange are finding plans no longer include out-of-network coverage. Citing concerns of keeping plan costs affordable and predictable, the New York State of Health did not require plans sold on the exchange offer out-of-network coverage. Rather, in establishing the New York State of Health, the only condition regulators imposed on insurers regarding out-of-network coverage was the requirement that if they offer out-of-network coverage to individuals purchasing insurance directly, they must also offer it through the exchange. While the Department of Health had indicated that the 2015 exchange invitation would include a requirement for out-of-network benefits, the final invitation did not include such requirement. Instead the 2015 invitation continued the requirement that if the applicant offered an out-of-network product outside of the exchange, it must also offer such within the exchange at platinum and silver levels. Further, the invitation encouraged insurers to offer such products within the exchange if they do not offer such outside of the exchange.

As insurance carriers put into effect cost saving measures, coverage the Affordable Care Act does not mandate, such as out-of-network coverage, is being eliminated. Insurers across the state faced concerns that competitors would not offer out-of-network coverage, leaving them to attract the sickest, most costly patients if they did offer this coverage. The result has been most insurers chose to eliminate the out-of-network option in all their plans marketed to individuals. This coverage remains an option in a handful of counties in the state.

This situation is compounded by recent reports that the plans being offered on the exchange have very limited networks. The Wall Street Journal reported results of a McKinsey report which looked at federal and state-run exchanges in 20 cities, finding that 60% of health plans offered coverage at fewer hospitals compared to current individual

plans. Narrow networks restrict access and further illustrate the need for an out-of-network coverage option.

While the 2014-15 Budget did include monumental changes protecting consumers from surprise medical bills resulting from out-of-network care, those provisions did not address access to out-of-network coverage in the individual market. While policies containing out-of-network coverage will likely cost more than those that do not provide this coverage, for individuals facing certain illnesses or having specific health care needs, this is affordable and necessary option that must be made available. Additionally, for individuals who previously sought care by a particular provider no longer included within a their network, this added option may be well worth the extra expense. By requiring insurers to provide out-of-network coverage as an option, this legislation will provide and protect consumer choice, and ensure patients can maintain access to the provider of their choice.

Legislative history

2014: S.6207

Fiscal implications

None.

Effective date

The first of January next succeeding the date on which it shall become law, and shall apply to contracts and policies issued, renewed, modified or amended on or after such date.