Relates to rates and payments under the child health insurance plan; provides for determination of contract rates by the superintendent and for adjustment of subsidy payments through March 31, 2014.
TITLE OF BILL: An act to amend the insurance law and the public health law, in relation to the child health insurance plan
PURPOSE: To clarify the prior approval rate setting process for CHP and repeal the automatic subsidy payment reduction for organizations approved to provide CHP that results in a twenty-eight percent difference between the average subsidy payment for all organizations approved to provide CHP on April 1, 2010, and the subsidy amount that the organization would otherwise receive as determined by the Department of Financial Services.
SUMMARY OF PROVISIONS:
Section 1 amends section 1120 of the insurance law to clarify that the Superintendent of the Department of Financial Services has the authority to determine rates for CHP contracts.
Section 2 amends section 2511 of the public health law to sunset the automatic CHP subsidy reduction effective March 31, 2014.
JUSTIFICATION: Premium rates for CHP contracts are currently determined by the Superintendent of Financial Services. This bill confirms and clarifies the Superintendent's rate making authority to ensure regulatory action is not taken to change the rate-making process.
The 2010 New York State Budget imposed a twenty-eight percent reduction to CHP subsidy payment amounts that exceeded the statewide average CHP subsidy payment for the State Fiscal Year beginning April 1, 2010. This statutory provision was intended to be a one-time cut to help fill a Budget deficit for the 2010-11 State Fiscal Year. However, because the drafters of that provision inadvertently failed to include a sunset date, the twenty-eight percent subsidy reduction has been automatically reoccurring every year, erroneously reducing all justifiable subsidy increases approved by the Department of Financial Services (DFS) by amounts above the 201 statewide average premiums from 2010. This legislation would correct this harmful drafting error to allow reasonable increases that are approved by DFS to be received without being reduced by a statutory provision that was never intended to continue beyond 2010
LEGISLATIVE HISTORY: This is a new bill
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5218 2013-2014 Regular Sessions IN SENATE May 14, 2013 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law and the public health law, in relation to the child health insurance plan THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (c) of section 1120 of the insurance law, as added by chapter 922 of the laws of 1990, is amended to read as follows: (c) The duration of such contracts or arrangements, THE RATES OF SUCH CONTRACTS, and the extent of exposure thereunder by insurers, article forty-three corporations or health maintenance organizations shall be determined by the superintendent. S 2. Paragraph (e) of subdivision 8 of section 2511 of the public health law, as added by section 21-a of part B of chapter 109 of the laws of 2010, is amended to read as follows: (e) The commissioner shall adjust subsidy payments to approved organ- izations made on and after April first, two thousand ten THROUGH MARCH THIRTY-FIRST, TWO THOUSAND FOURTEEN, so that the amount of each such payment, as otherwise calculated pursuant to this subdivision, is reduced by twenty-eight percent of the amount by which such calculated payment exceeds the statewide average subsidy payment for all approved organizations in effect on April first, two thousand ten. Such statewide average subsidy payment shall be calculated by the commissioner and shall not reflect adjustments made pursuant to this paragraph. S 3. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10976-01-3