Administration of the Individual Direct Payment Health Insurance Program The New York State Health Care Reform Act of 2000 (HCRA) provides for an Individual Direct Payment Health Insurance Program that makes it possible for individual consumers to have access to comprehensive health insurance. The Program provides health insurance for those who do not have coverage through their employer or other means. All New York State HMOs are required to offer standardized individual enrollee contracts to members of the Program on an open enrollment basis. To offset the premiums that individuals are required to pay for coverage under the Program, HCRA required the State Insurance Department to establish certain stop-loss funds to enable the HMOs to be reimbursed for high-cost claims with savings being passed on in the form of reduced premiums. We examined whether the stop-loss funds that were provided to participating HMOs were correctly used in setting their premium rates, and found that they were.
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