By Jan. 1, 1996, New York's 31 HMOs must offer a point-of-service option to individual subscribers.
The point-of-service mandate was signed into law last week by Gov. George Pataki. According to the Group Health Association of America, New York is the first state to require HMOs to offer an option for individuals to obtain services out of network.
New York's legislation also mandates a standardized benefit package that includes prescription drug coverage.
The reforms are intended to expand the healthcare insurance choices available to individuals in the state. Currently, 1 million New Yorkers purchase health insurance on an individual basis.
New York's 1992 community-rating and open-enrollment law required HMOs to provide coverage for individual subscribers. Some 110,000 individuals are covered by HMOs. But most plans don't contain prescription drug coverage, Pataki said.
In a statement accompanying the bill, Pataki said the point-of-service option will provide individuals with greater choice and should ease the burden on Empire Blue Cross and Blue Shield. Empire serves 80,000 individual subscribers on a fee-for-service basis. Because of continuing rate increases, the coverage has become more expensive. In fact, Empire has discontinued selling new policies.
Individual HMOs and the New York State Health Maintenance Organization Conference and Council proposed the point-of-service option last year, said Les-lie Moran, a spokeswoman for the 25-member association. "Our feeling was the HMOs would rather provide high-quality, effective care for this population (than) subsidize less-efficient care through indemnity insurers."