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Empire State Updates Health Rules

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Officials at the New York State Insurance Department have adopted two new sets of health insurance program regulations.

One set applies to a “market stabilization” program that tries to buffer insurers in the individual and small group health insurance markets, including the Medicare supplement market, against variations in underwriting risk.

The other set of new regulations affects the Healthy New York plan, a health plan that serves individuals and small employers in the state.

New York requires insurers in the individual and small group markets to sell coverage on a guaranteed-issue basis. The market stabilization update is an emergency regulation that is supposed to protect insurers that end up covering a disproportionate number of high-risk enrollees.

New York is trying to replace the old stabilization program, which ended in 2005, with a new pooling methodology, which is supposed to become fully operational this year, officials say.

For now, though, “there is no market stabilization process in place, and insurers and health maintenance organizations may not be reasonably protected against unexpected significant shifts in the number of persons insured,” former New York Insurance Superintendent Howard Mills says in a statement explaining the need to adopt the regulation on an emergency basis.

The program described in the emergency regulation will fill in while the new pooling system is under construction, Mills says.

The emergency pooling system allocates $80 million in funding for the pools.

The emergency regulation describes the process insurers and HMOs should use to file claims against the pool. Pool calculations include claims that exceed $20,000.

The changes to the Healthy New York program, made with a regulation adopted through the ordinary process, require Healthy New York to cover well-child visits and immunizations for children without requiring any co-payments.

Another change requires the program to offer individuals and small employers the option of buying Healthy New York health coverage without buying prescription drug benefits.

The Healthy New York update also will permit small employers that decide to offer coverage to part-time workers to choose the level of premium contributions to be made on behalf of the part-time workers.

A copy of the new regulations affecting the Healthy New York and direct payment stop-loss relief programs is on the Web at Document Link

A copy of the market stabilization program regulation is on the Web at Document Link