Study: Regulatory Reform would Expand Health Coverage in NY

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CONTACT: Hannah Martone

(646) 839-3313

Up to 37 percent of New Yorkers currently lacking health insurance would be encouraged to purchase their own coverage if the price was reduced through reform of state insurance regulations, according to a new study issued today by the Manhattan Institute for Policy Research and the Empire Center for Public Policy.

“Uninsured New Yorkers of all income levels would benefit from access to a reasonably priced private-insurance market,” the study says. “The existence of such a market would ensure that scarce public dollars are reserved for government programs like Medicaid that protect New York’s poorest and sickest citizens.”

The study, entitled “Healthier Choice: An Examination of Market-Based Reforms for New York’s Uninsured,” says New York has suffered from two regulatory mandates that would be replicated nationally under current congressional health care reform proposals. Those mandates-“guaranteed issue” and “community rating”-were well intentioned but ineffective in substantially reducing the state’s uninsured population, according to the study.

Based on a micro-simulation model, augmented by surveys and focus group research, study authors Stephen Parente and Tarren Bragdon found that repeal of New York’s community-rating and guaranteed-issue laws would potentially reduce the price of individual insurance coverage by 42 percent and encouraging up to 37 percent of the uninsured to buy coverage.

Parente and Bragdon also recommend the following measures:

Allowing health insurance shopping across state lines. If 25 percent of the state market participated in out-of -state insurance shopping, there would be a 17 percent reduction in the number of uninsured. If 100% participated, there would be a 26 percent reduction.

Reducing the number of mandates required. If 20 mandates were removed, premiums would decrease by 9 percent, if 40 mandates were removed, premiums would decrease by 18 percent.

Approving Health Savings Accounts in New York’s individual insurance market. Allowing Health Savings Accounts into the market would reduce the number of uninsured by 8,000.

The study also recommends “a modest assessment on policyholders in the individual and small-group insurance markets” to subsidize a high-risk pool for uninsured New Yorkers with pre-existing conditions who would otherwise be unable to find affordable coverage.

To receive a copy of the report via email or to schedule an interview with the authors, Steve Parente and Tarren Bragdon, please contact Hannah Martone at 646-839-3313 or, or Tim Hoefer at 518-434-3100.