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Health insurance taxes to add more to the burden

People throughout New York State are aware of the tremendous challenges our lawmakers face in addressing our state's budget gap, both in the current fiscal year and the one ahead.

However, the nearly $350 million in new and increased taxes on health insurance included in the deficit reduction package approved by the Legislature this week will be disastrous to New York businesses that are already struggling in this economy.

With titles such as "covered lives assessment," "patient services surcharge" and others, New York State has already imposed several taxes on health insurance. For the average family policy, these taxes already account for $950 to $1,500 annually in the cost of their health care premiums, without adding any benefits or services.

Now, lawmakers want to hike those taxes even higher, adding even more to the cost of a policy.

And it is only going to get worse.

The 2009-2010 budget package proposed by Gov. David A. Paterson includes another $422 million in taxes, assessments and surcharges on health insurance coverage. Lawmakers call them "revenue raisers" but they are taxes -- taxes that are a direct hit on New York's businesses and their hard-working employees.

For every 1 percent that health insurance premiums rise, 300,000 people across the country lose coverage either because employers can no longer afford to offer it, or because employees can no longer afford their increased shares of the premiums.

In New York State, we can only anticipate similar backlash, further adding to the state's problem by causing even more New Yorkers to become uninsured.

In addition, many employers who continue providing health benefits will do so at the expense of new or existing jobs or wage increases.

BlueCross BlueShield of Western New York, a major employer and investor in this community's health and well-being, is concerned that these proposed taxes will cause additional stress to the region's employers and residents, many of whom are facing uncertain futures and difficult decisions.

We also are concerned that lawmakers are not considering other options proposed by insurers that would actually increase the affordability of health care for individuals and businesses without adding to the state's budget burden.

At a time when New Yorkers and the rest of the country have expressed a resounding desire to make health insurance more affordable for more people, it is ironic that New York State's lawmakers are considering one of the very things that puts coverage further out of reach.

New York must look at ways to make health insurance more affordable. Higher taxes on health care coverage are not the answer.
Alphonso O'Neil-White is president and chief executive officer of BlueCross BlueShield of Western New York.

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