Sen. Tom Duane Speaks Out Against GHI/HIP Privatization Proposal

http://www.tomduane.com/news_2008/letters_2008/Emblem%20Health%20Letter.html

July 2, 2008

Honorable Eric R. Dinallo
Superintendent
New York State Insurance Department
25 Beaver Street
New York, NY 10004

Dear Superintendent Dinallo:

With the 2008 Legislative Session behind us, I understand the New York State Insurance Department will be continuing its consideration of the proposed conversion of GHI/HIP to the for-profit entity EmblemHealth, Inc. I am deeply concerned about the impact this conversion would have on many of my constituents and GHI/HIP members throughout New York State.

As you know, NY Insurance Law §7317(b) prohibits such a change in the status of not-for-profit health insurance entities to a for-profit company if the move would "adversely affect the applicant's contractholders or members," or "negatively impact on the delivery of health care benefits and services to the people of the state of New York." I believe that this conversion will both negatively impact the provision of health care services to the people of New York, and, more specifically, will adversely affect those individuals who are currently enrolled in GHI and HIP's health plans.

All other states considering such conversions within the past five years – Kansas, Washington, North Carolina, and Maryland – have rejected these plans. As with all other for-profit corporations, the foundational legal obligation of EmblemHealth will be to maximize profits for its shareholders. The pursuit of profit will therefore be the company's premiere priority, surpassing the provision of quality health care services to its members as the company's primary goal. This will inevitably lead to higher prices for health care consumers and the cutting of corners with respect to the quality of health care services. If EmblemHealth raises its rates, its competitors are likely to do so as well, and all New Yorkers will suffer. A number of studies have shown that for-profit health insurance companies provide poorer quality health services and have lower rates of customer satisfaction than not-for-profit health care providers.

Currently, both GHI and HIP are financially viable and provide quality health care services to New Yorkers. There is absolutely no reason to permit a conversion to not-for-profit status, particularly when for-profit health care providers have been proven to be worse for New Yorkers than not-for-profits. Comprehensive, quality, healthcare for all New Yorkers must be the primary goal of health care providers – not the acquisition of profit. For all these reasons, I strongly oppose the conversion of GHI and HIP to the for-profit EmblemHealth.

Thank you very much for your consideration of my position on this important matter.

Sincerely,


Thomas K. Duane

New York State Senate
29th District