Carl Campanile of the New York Post writes - “As the health-care debate comes to a head in Washington, a new political war over medical coverage is about to erupt in Albany, where Gov. Paterson is seeking authority to curb “excessive” rate hikes imposed by insurers.

Tucked in Paterson’s budget plan is a proposal to give the state’s superintendent of insurance “prior approval” over rate hikes in medical premiums, which would end a 10-year experiment with deregulation. President Obama has recommended something similar on the national level…

Paterson estimates the state will save $70 million in the upcoming fiscal year and $150 million by 2012 by restoring state authority over rate hikes. Fewer residents would be forced to go on the public dole by keeping rates lower in the private insurance market, officials said.

He also wants to limit insurer profits by requiring that 85 percent of their revenues go toward customer service.
But insurance companies said giving the state control over insurance premiums would backfire.
“It’s tantamount to price fixing. It will create havoc in the marketplace,” said Leslie Moran, spokeswoman for the NY Health Plan Association.

“There will be political pressure for the executive and the Legislature to keep rates artificially low. You’re not doing anything to control medical costs. You will have plans leave the state and go out of business.”

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