Aside from the fact that we must come to grips with the knowledge that we are each one year older, I do not know anyone who is saddened that 2008 is behind us.Never has the ancient Chinese curse "may you live in interesting times" been more appropriate.
The year was certainly interesting. It was interesting in the way a letter from the IRS informing you that you are being audited is interesting. "Interesting" rarely seems to work out well. In 2008, interesting put us all in jeopardy.
What if a friend predicted, on New Year's Eve, 2007, that in one year, a gallon of regular gasoline would cost over $4.00 and then fall to below $2.00? Further, he said that by next year, Bear- Sterns and Lehman Brothers would no longer exist; the Federal Government would own Fannie Mae and Freddie Mac, AIG, Citigroup and a portion of most of the banks in the United States. Unemployment would be high, and the Federal deficit would top a Trillion Dollars! With respect to New York, Eliot Spitzer would resign in disgrace, the Attorney General would investigate the State Police for political activities, the State Senate would have a majority of Democrats (OK that one was predictable), and Wall Street, as we knew it, would most likely never again exist. You might have advised your friend to get help, or at least to stop drinking that night. Nonetheless, those events happened.
The end of 2008 has brought on a heightened level of reflection in all of us. The New York Insurance Department has published its reflections on 2008, entitled "New York State Insurance Department in 2008: A Year of Accomplishments". The Insurance Advocate ran it last issue in full. By anyone's estimation, 2008 brought the most cataclysmic set of events striking our economy as a whole, and the insurance industry in particular, since perhaps, the tragic events of September, 2001. In keeping with its 147 year tradition of excellence, the New York Department rose to the occasion and carried out its vital mission of solvency regulation and insurance consumer protection and was noticed and appreciated by the entire nation. The Department's role in the AIG rescue, the highlight of the problem with credit default swaps, and the stabilization of the financial guaranty markets is well known and was dealt with in earlier columns. Of course, these accomplishments were highlighted in the Department's review. We all understand the need for the Department to react and handle the financial market meltdown. However, one of the most amazing accomplishments of the Department in this past year and previous years is that while dealing with the major events, the Department must and does continue to handle its equally vital day-to-day business of regulating the insurance industry. The 2008 review of the Department reveals the breathtaking scope and extent of its responsibilities which must be handled, whether the financial world is collapsing or not.
Not in the Report While the continued work of the Department was impressive, it is notable that some items were not included in the report. I am sure insurers would have liked to see some report on the Financial Modernization or Medical Malpractice Task forces. Given the difficult economy facing the insurance industry in New York, the relief expected from the work of those two groups would be welcome and may provide the industry needed help in weathering the storm. Further, these two groups were dedicated to improving the New York business climate for the attraction of new insurance businesses that could potentially bring a much needed "shot-in-the-arm" to New York's financial services economy. It would be a shame if the work of these task forces were to be "lost" because of the distractions presented by the other serious problems facing the Department.
Also absent is a report of progress on the "principles-based" regulation project which was intended to free up the industry from the strictures of tediously complex rules in exchange for the adoption of general principles that could be flexible enough to adapt to each individual business model while continuing to ensure that the insurance industry remained secure and consumers would be protected.
The work of the Department is never finished. We compliment the Department on another year of regulatory excellence and relay our best hope that the worst is behind us and we be "blessed" with a nice, calm "boring" year.
A "boring" year wouldn't be so bad. Governor Paterson Seeks To Expand Health Care Insurance Coverage In his "State of the State" speech, Governor Paterson outlined several proposals designed to expand health insurance coverage to those vulnerable New Yorkers who are currently uninsured. He stated, that it is estimated that 2.5 million New Yorkers do not have health insurance and 31% of those uninsured are between the ages of 19-29.
Thus, in an effort to cover as many in this group as possible, the Governor will propose legislation that will expand dependent coverage on family health insurance policies to family members who are between the ages of 19 and 29, regardless of whether or not they attend college. While the families themselves would be required to pay for this expansion of coverage, the cost would be lower than it otherwise would be because it could be purchased at the group policy rate and, in addition, it would be age rated.
The Governor also intends to partner with the federal government to expand the Family Health Plus program by increasing the eligibility standard to 200 percent of the federal poverty level, a move that is expected to make more that 400,000 additional New Yorkers eligible for this government- assisted coverage.
The proposal contains an increase in the amount of funding available for hospitals, community health centers and community mental hygiene clinics serving increasing numbers of uninsured patients. There is intended to be an increase of $282 million to the Hospital Indigent Care Pool, and over 50 percent of these funds will go to subsidize State Hospitals.
The well-intentioned proposal does have one potentially troubling aspect for the health insurance industry. In an effort to provide coverage for nearly one-half of those 2.5 million uninsured New Yorkers that the Governor believes are eligible for Medicaid or Child Health Plus, he desires to eliminate the asset test and the finger printing requirement. Further, the Governor seeks to eliminate the requirements that applicants appear for a "face-to-face" interview to establish eligibility.While I understand the reluctance or inability of some to comply with these basic requirements, the potential for fraud should not be overlooked. Without these screening requirements in place, many people who are not entitled to coverage could enter the program and this development could drastically increase the costs of these programs. In a time where there a calls to eliminate fraud and waste in our public health insurance programs this proposal carries the potential to present a major cost driver which could ultimately risk our ability to provide these coverages to those truly eligible.
