ALBANY— “The $481 million in additional taxes on health insurers proposed in the Executive Budget will not only drive up the cost of health insurance, they will damage an industry that is important to the state's economy,” said Kenneth Adams, president & CEO of The Business Council of New York State.
“New York health insurers employ approximately 35,000 people across New York State. Increasing the cost of health insurance is likely to lead to more uninsured New Yorkers and less growth in this industry,” added Adams. “Driving up health insurance costs by adding taxes is simply the wrong direction for New York.”
“Make no mistake adding nearly a billion dollars in new taxes will drive up the cost of health insurance for employers and workers. For many this could be the tipping point that leads to a decision to drop coverage,” said Adams.
On top of the $348 million in new health insurance taxes that were passed as part of the Deficit Reduction Plan in February, the proposed budget calls for an additional $481 million in new taxes on this industry, including:
- $63 million from establishing a third party administrator claims processing fee, which is a $1 assessment on health, pharmaceutical, dental and vision claims valued at more than $20 processed by entities that administer self-funded health insurance plans. We expect that self-insured employers would ultimately be responsible for paying this claims fee.
- $180 million by increasing the state Insurance Department Section 332 assessments on all New York insurers; $108 million is estimated to be paid by health insurers.
- $62 million by increasing the Article 32 premium tax on commercial insurers from 1.75 percent to 2 percent.
- $126 million by increasing the HCRA hospital services surcharge – essentially a sales tax on health care services performed in hospitals – from 8.95 percent to 9.63 percent.
- $50 million from expanding the (proposed increased) 9.63 percent hospital services surcharge to other services provided in other health-care settings by establishing a physician procedure surcharge.
New Yorkers - individuals and businesses - that purchase private health insurance currently pay more than $3.75 billion in health taxes through the Covered Lives Assessment; the HCRA hospital services surcharge; the Insurance Department Section 332 industry-wide assessments that fund Department operations and are also sub-allocated to other agencies and programs; and the 1.75 percent premium tax. They simply cannot afford new taxes to be added on.
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