State lawmakers ended their session by passing a flurry of bills making health insurance in New York State even less affordable.

One measure voted through in the final week increased a tax on health insurance by $40 million.

Four other last-minute approvals would impose new coverage mandates, regulations and paperwork requirements on health plans—each of which would drive up insurance premiums that are already among the highest in the U.S.

As of 2019, family coverage cost an average of almost $23,000 a year in New York, which was 12 percent above the national average and second only to Alaska. 

One factor behind those high costs are the many coverage mandates imposed by Albany. Most are proposed in the name of expanding or improving medical coverage, but rarely are they subject to rigorous cost-benefit analysis. Many large employers are self-insured, which exempts them from state regulations under federal law. The mandates mainly affect smaller businesses and individuals, groups that are liable to drop coverage when it gets more expensive.

As a coalition of employers and insurers warned lawmakers on Thursday:

With over 40 mandated benefits in statute that require coverage of more than three dozen types of treatments or services, New York has one of the most extensive lists of health insurance mandates of any state in the nation. While the cost of some of these benefits in isolation may be relatively small, the collective impact of mandated benefits adds to the cost of insurance, which contributes to New York already having the highest average premiums in the lower 48 states.

New York also imposes $4.8 billion worth of taxes on health coverage, which are the state’s third largest source of revenue after income and sales taxes.

One of these levies, known as the covered lives assessment, charges a flat fee for each insured person or family. The rate varies dramatically from region to region—ranging from a low of $9.20 per individual in the Utica-Watertown region to a high of $171.67 in New York City.

This variation is a throwback to the levy’s original purpose, which was to subsidize doctor-training programs that are more concentrated in some parts of the state than others. The money has since been diverted to other health-related purposes, such as funding Medicaid, but the disparity in the rates was never adjusted.

This week, the Assembly and Senate passed A. 5339 (Paulin)/S. 5560 (Reichlin-Melnick), which would increase the assessment by $40 million, or 4 percent. The money is to be distributed to New York City and 57 other county governments, nominally to finance their expenses for providing “early intervention” services for developmentally disabled preschool children.

Other health insurance-related measures approved in the final week include: 

• A. 3516 (McDonald)/S. 7075 (Breslin), requiring insurers to generate “explanation of benefit” letters for pharmaceutical coverage.
• A. 1396 (Gottfried)/S. 3762 (Breslin), requiring the registration and licensing of pharmacy benefit managers.
• A. 7598 (Gottfried)/S. 6603 (Skoufis), boosting Medicaid dispensing fees to retail pharmacies.
• A. 5854 (Joyner)/S. 3566 (Breslin), limiting the use of mail-order pharmacy services by health plans.

Two other measures were approved earlier in the session.

A provision of this year’s state health and mental hygiene budget, approved in early April requires insurers to cover services provided by “crisis stabilization centers,” a newly created category of providers “for persons at risk of a mental health or substance abuse crisis.”

Another bill, A. 4668 (Peoples-Stokes)/S. 4111 (Breslin), prohibits health plans from adjusting their preferred drug lists in the middle of a plan year.

The budget bill was signed into law by Governor Cuomo on April 19. The other six measures remain subject to his possible veto.

This year, lawmakers introduced a total of 100 insurance mandate proposals, 46 of which had sponsors in both houses. In addition to the seven that passed both houses, there were four more that passed the Senate only, and one that passed the Assembly only.