NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3734
SPONSOR: Rosenthal (MS)
 
TITLE OF BILL:
An act to amend the public health law and the insurance law, in relation
to requiring health care insurers to offer coverage for health care
provided by out-of-network providers
 
PURPOSE:
Ensures consumer choice by providing for continued access to out-of-net-
work insurance coverage
 
SUMMARY OF PROVISIONS:
This bill amends Public Health Law § 4403 and Insurance Law §§ 3217-e
and 4306-d to require that every insurer offer, both inside and outside
of the exchange, out-of-network coverage in at least one policy option
and as an optional rider. It provides an effective date of January 1st
next succeeding the date of enactment.
 
JUSTIFICATION:
Across the state, individuals accessing insurance through the statewide
health benefit exchange, "the New York State of Health," and outside of
the exchange are finding plans no longer include out-of-network cover-
age, Citing concerns of keeping plan costs affordable and predictable,
the New York State of Health did not require plans sold on the exchange
offer out-of-network coverage. In establishing the New York State of
Health, the only condition regulators imposed on insurers regarding
out-of-network coverage was the requirement that if they offer out-of-
network coverage to individuals purchasing insurance directly, they must
also offer it through the exchange.
As insurance carriers put into effect cost saving measures, coverage the
Affordable Care Act does not mandate, such as out-of-network coverage,
is being eliminated. Insurers across the state faced concerns that
competitors would not offer out-of-network coverage, leaving them to
attract the sickest, most costly patients if they did offer this cover-
age. The result has been most insurers chose to eliminate the out-of-
network option in all their plans marketed to individuals. This coverage
remains an option in just 8 counties in the state, all in Western New
York. Some New Yorkers who previously had out-of-network coverage on the
individual market are allowed to keep it through riders on their policy;
however, other individuals are not eligible to purchase such riders.
This situation is compounded by recent reports that the plans being
offered on the exchange have very limited networks. The Wall Street
Journal reported results of a McKinsey report which looked at federal
and state-run exchanges in 20 cities, finding that 60 of health plans
offered coverage at fewer hospitals compared to current individual
plans. Narrow networks restrict access and further illustrate the need
for an out-of-network coverage option.
While policies containing out-of-network coverage will likely cost more
than those that do not provide this coverage, for individuals facing
certain illnesses or having specific health care needs, this is an
affordable and necessary option that must be made available. Addi-
tionally, for individuals who have used a particular provider not
included within a network, this added option may be well worth the extra
expense. By requiring insurers to provide out-of-network coverage as an
option, this legislation will provide and protect consumer choice, and
ensure patients can maintain access to the provider of their choice.
 
LEGISLATIVE HISTORY:
A.8494 of 2013-2014
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
The first of January next succeeding the date on which it shall become
law, and shall apply to contracts and policies issued, renewed, modified
or amended on or after such date.