Over the past several years health insurance consumers were forced to pay double-digit rate increases. Under current statute, health insurers are permitted to file and use rate increases with no regulatory approval by the State Insurance Department (SID).

Between 1996 and 2000, health insurers that needed to increase rates for their individual and small group products by more than 10% due to medical care inflation, increases in taxes and fees, administrative costs and to maintain reserve requirements were required to submit a rate increase request to the SID for approval before such rate could be implemented. Prior to 1996 all rates for individual and small group products were subject to the prior approval process. The prior approval requirement provided consumers with a level of comfort that their health insurance rates were subject to regulatory review to determine if they were justified at the same time, industry representatives argue rates were set artificially low and the approval process delayed the ability to charge an adequate rate.

Governor Paterson has recently proposed legislation, A.8280 (Morelle), which would reinstate the prior-approval process for individual and small group premium increases and would also grant the Superintendent of Insurance broad authority to increase the medical loss ratio of affected carriers. The medical loss ratio determines the amount of premiums an insurer is required to use to pay claims. Currently the statutory MLR for individual policies is 80% and 75% for small groups while MLRs for large groups are set by the insurer.

The purpose of this hearing is to gather information about the potential impact that the Governor's legislative proposal may have on health insurance premiums and on the health insurance industry in New York State.

Persons wishing to present pertinent testimony to the Committee at the above hearing should complete and return the enclosed reply form as soon as possible. It is important that the reply form be fully completed and returned so that persons may be notified in the event of emergency postponement or cancellation.

Oral testimony will be limited to 10 minutes' duration. In preparing the order of witnesses, the Committee will attempt to accommodate individual requests to speak at particular times in view of special circumstances. These requests should be made on the attached reply form or communicated to Committee staff as early as possible.

Ten copies of any prepared testimony should be submitted at the hearing registration desk. The Committee would appreciate advance receipt of prepared statements.

In order to further publicize these hearings, please inform interested parties and organizations of the Committee's interest in hearing testimony from all sources.

In order to meet the needs of those who may have a disability, the Assembly, in accordance with its policy of non-discrimination on the basis of disability, as well as the 1990 Americans with Disabilities Act (ADA), has made its facilities and services available to all individuals with disabilities. For individuals with disabilities, accommodations will be provided, upon reasonable request, to afford such individuals access and admission to Assembly facilities and activities.

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Persons wishing to present testimony at the public hearing on Regulatory Approval of Health Insurance Premium Rates are requested to complete this reply form as soon as possible and mail, email or fax it to: