Hundreds of small business owners in New York are appealing to the regulators in the state in demand of a rollback of the double-digit hikes in health insurance premiums, which they claim are outright criminal, according to the New York Post.

Fuming small business owners are writing letters to insurance carriers and the New York State Insurance Department in which they are asking Albany to do something to reduce these horrendous small business insurance premium hikes with a new law that gives the agency a wider oversight of the cost of insurance premiums.

One employer wrote to Independent Health stating, “I recently received a notification by mail that you have submitted a proposed rate increase on our health insurance of more than 37%. Are you kidding me?” He also wrote, “If this new rate prevails, we will not be able to afford our health insurance and will be forced to drop coverage… We have a very high deductible plan! This type of rate is criminal — since there isn’t really any other option in my market place.”

New Law Places Restrictions on Insurance Rate Hikes

Under this new law, health insurance providers have to get prior approval from the state insurance department before the rate hikes take effect in 2011. In addition, customers are also able to submit comments to the regulators in association with the review.

New subsidies and insurance pools are offered by federal health care reform (including health exchanges), in order to help make it more affordable for individuals and small businesses to obtain health care coverage. However, there will not go into effect for several more years from now.

The New York Health Plan Association’s Leslie Moran defends the insurance premium hikes, saying that besides medical inflation, the Legislature and the governor raised taxes on health care the previous year, and costly new benefits have been added by federal health care reform to begin immediately.

Recent proposals about buying health insurance across state lines have sent many of us scrambling to check policies, and wondering whether such changes might mean it’s time to find a new insurer. After all, wouldn’t such a change open up the market and make it possible to get cheaper coverage?

Unfortunately, it’s by no means certain that such a change would be largely beneficial. In fact, it’s actually possible that the end result might be more expensive insurance overall, and that over time, more Americans would find health insurance too expensive.

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