The Central NY Business Journal reported that the New York State Insurance Department again has the authority to review and approve health-insurance premium increases before they take effect.
Gov. David Paterson signed the bill allowing the reinstatement of the power today.
Since 2000, New York had regulated health-insurance premiums under a "file and use" law that "significantly" limited the state's ability to disapprove premium increases and allowed the insurance industry to regulate itself, the governor's office said in a news release.
The new law requires health insurers and health-maintenance organizations (HMOs) to make an application to the Insurance Department to implement premium increases.
The department would review the rate-increase applications, as well as the underlying calculations, to ensure that the rates are justified and not excessive, the governor's office said.
The law would apply to all rate increases taking effect on or after Oct. 1, 2010.
In addition, the legislation will immediately require health insurers and HMOs to spend more of every premium dollar they collect on medical claims.
In particular, the law raises the "medical-loss ratio," or the percentage of premium spent to provide medical care, from 75 percent to 82 percent for small businesses and from 80 percent to 82 percent for individuals.
In a statement released Tuesday night, the New York State Conference of BlueCross BlueShield Plans expressed "complete disappointment" over what it calls "government-imposed price controls." Read more here.