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Friday, November 13, 2009

Small Biz Health Care Daily: New York Costs for All

New York ranks among the most costly states in most things – especially things tied to government spending, regulation and taxation. That includes health care coverage. New York regulates, and costs escalate.

A November 12 op-ed from The Wall Street Journal by an independent businessman – a writer – living in New York makes some critical points about the national health care debate.

Andrew Heinze noted:

• I'm a registered Democrat living in New York City, and I buy my own health insurance. But now, having seen the health-care reform bill that passed the House, I'm preparing for life without health insurance.

• Before I come to the big question—why will I lose this insurance plan if anything like the House bill becomes law?—I want to address a smaller one. Why do I choose the Empire "Tradition Plus" plan instead of a comprehensive HMO-type plan that covers physician fees, prescriptions, etc.? Because, unlike other states, New York already mandates two things that the current federal health-care reform will mandate. The first mandate prohibits insurers from denying coverage because of a pre-existing medical condition. The second mandate prohibits insurers from denying coverage, or determining prices, based on age. The result is that HMO plans in the state are now very expensive.

• The House health-care reform bill hinges on what it calls a "qualified" health-care plan. Individuals will be required by law either to buy a plan that meets the criteria of a qualified health-care plan or pay a fine. What are those criteria? They're the basic components of a comprehensive HMO-type plan, which means that Empire's "Tradition Plus" will not qualify because it covers only hospital costs. In other words, if President Obama signs into law the kind of health-care reform bill that is currently on the table, I will have only two choices: buy an expensive qualified plan or pay a fine for being uninsured.

Heinze also noted that there is nothing in ObamaCare that would reduce his costs in New York. Instead, New York’s misguided regulatory costs would spread elsewhere. Does the rest of the nation really want to be like New York?

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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