December 5, 2008

Governor agrees with Suozzi and Weitzman’s call for reduction in State health insurance premiums;
Lower 2009 rates will save County $11.4M 

Nassau County will save approximately $11.4 million in health insurance premiums in 2009, the result of strong urging by both County Executive Suozzi and County Comptroller Howard S. Weitzman to keep 2009 State’s health insurance program (NYSHIP) rates flat. NYSHIP earlier warned local governments that rates could rise by 7.9% in 2009 and the County had budgeted $236.6 million to pay for the costs, but the lower increase of just 1.2% will mean big savings for the County.

Suozzi and Weitzman presented an analysis several months ago showing that participants in the State’s health insurance program (NYSHIP) had been charged inflated premiums since 2002 and they urged that 2009 rates be kept flat and that excess collections be returned. The Governor agreed that premium rates should be reduced for 2009.

“While I’m glad that based on our analysis the State took the action to pressure the insurance companies to lower rates, this is a good first step to further reduce health insurance costs in the NYSHIP program, the County Executive said. “Given the economic concerns, we need to continue to look for creative means by which to control costs.”

 “This shows what can be accomplished when all levels of government work together for the betterment of taxpayers. This action by the Governor will not only save Nassau County taxpayers  money, but also every school district, village and municipality that participates in the New York State health insurance program,” said Weitzman.  “It’s a win-win for the whole state.”

The 80% reduction in the rate of premium increase is the lowest increase in over 10 years. It is anticipated to save State taxpayers approximately $156 million; the saving for schools and local governments, mostly in Nassau County, will be approximately $116 million.

In October, Weitzman, Suozzi, local school superintendents and local elected officials stood together at a joint press conference to ask that 2009 health insurance premiums be lowered and that the excess charges be refunded. Working with State officials and supported by Town Supervisors and County Executives in Nassau, Suffolk, Westchester and Rockland, local village officials, and school districts around the state, NYSHIP and New York State Department of the Budget officials acted to reduce the excessive rates.

In addition to the 2009 premium reduction, Weitzman and Suozzi said they were still speaking with State officials seeking to recoup a portion of the excess premiums charged in prior years – an amount equal to $540 million state-wide and $21 million for Nassau County.  They suggest that the distribution be made as a one month premium holiday for all NYSHIP participants. Nassau County’s study shows that the premiums paid to NYSHIP for benefits provided by insurance companies had far exceeded what was needed to cover the cost of the program. Lowering the premiums in 2009 will now help end that practice.

Comptroller Weitzman repeated his call for an independent review of NYSHIP to provide clear accounting for premiums, reserves and earnings on funds held by the program and to review their operations. County officials are also asking that NYSHIP operate with more transparency, allowing state and participating agencies to access data and that the program work with the County to contain costs and develop new projects targeted at improving employee health.

The analysis of NYSHIP's excess charges was based on a report by the County’s healthcare consultants, George Kalkines and Jeffrey Thrope of Manatt, Phelps & Phillips, LLP, assisted by Charles Pendola of Hidden Assets, LLC.