Empire State Updates Health Rules

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.