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Some Empire State HMO Members Will Get Refunds

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The New York State Insurance Department is preparing to transfer $71 million in surplus funds from market stabilization pools to holders of individual and family health maintenance organization coverage.

New York, which requires HMOs and point-of-service plans to offer individual and family coverage on a guaranteed issue, community-rating basis, has been running the funds in an effort to compensate HMOs and POS plans for variations in the health of their insureds.

The state is trying to move to a new adjustment mechanism, and participating carriers have contributed more cash than the pools need, New York officials says.

Officials will be giving the surplus to the carriers and are asking the carriers to give the surplus to the customers in the form of rate credits or cash refunds.

The average distribution will be $1,000 for individuals and $2,500 for families, officials estimate.

The distributions will go to about 67,000 individual and family HMO and POS plan members, officials say.