Enacts the health care tax reform act; eliminates certain taxes and assessments on health insurance.
This bill, titled the “health care tax reform act,” would phase down and ultimately eliminate several state-imposed taxes and assessments tied to health insurance and hospital care. It targets the covered lives assessment under the financial services law, the tax on accident and health insurance premiums under the tax law, and the hospital-related percentage allowances in the public health law. The bill sets a multi-year schedule beginning in 2025-2026 to reduce the covered lives assessment, ending it entirely by fiscal year 2031, while also reducing the premium tax on accident and health insurance policies and eliminating that tax by tax year 2031.
The bill also amends hospital assessment provisions so that the percentage allowances applied to certain payors, including private insurers, governmental payors, and uninsured patients, are gradually reduced over several years and reach zero by April 1, 2030 for most categories. In effect, the measure would substantially lower the cost burden imposed on health plans, insurers, hospitals, and ultimately consumers, by removing or reducing taxes and assessments that the bill’s sponsors describe as embedded in health care prices and insurance premiums.
If enacted, the bill would materially change New York’s tax and assessment structure for health care financing by repealing or phasing out several revenue streams currently used to support state health-related programs and hospital reimbursement mechanisms. It would amend the financial services law, tax law, and public health law, reducing the state’s authority to collect the covered lives assessment, lowering the premium tax on accident and health insurance contracts, and revising hospital surcharge/allowance formulas under sections 2807-j and 2807-s. The practical effect would be lower costs for insurers and hospitals, but also reduced state and health-system revenue that may otherwise support public health and provider funding.
The bill’s stated purpose and findings reflect a strongly pro-consumer, affordability-focused approach, arguing that health care taxes are regressive and make coverage and hospital services more expensive. Based on the bill text and caption, the measure appears designed to appeal to advocates for lower premiums and reduced health care costs. No committee transcript or vote history was provided, so there is no recorded legislative debate or roll-call sentiment to assess beyond the sponsors’ framing.
The main point of contention is likely to be the tradeoff between lowering health care costs for consumers and insurers versus reducing state and provider revenue. Supporters would emphasize premium relief, affordability, and the elimination of taxes they view as regressive and hidden in health care prices. Opponents would likely focus on the fiscal impact, including the loss of funds currently generated by assessments and taxes that help finance hospital payments, health programs, and insurance-related obligations. Because no committee discussion or votes are included, specific named opponents or supporters cannot be identified from the available record.