New York Gov. David Paterson has unveiled legislation to reform health care in the state, including a bill requiring health insurers to get approval from the superintendent of insurance before increasing premium rates.

For the last 13 years, New York has operated under a “file and use” system, where health insurers are allowed to increase premium rates for policyholders without first having to justify the increases to the state’s department of insurance.

David Paterson

Paterson’s proposed bill would reinstate the prior approval changes before they are put into effect, providing “better balance between consumers and insurers in the rate setting process,” the governor’s office said in a statement.

Other bills unveiled by the governor would extend the period of time for federal COBRA coverage from 18 to 36 months, permit families to cover their young adult dependents through age 29 under their employer-based insurance and enact a series of managed care reforms to ensure consumers have timely access to necessary health services.

“These reforms will make health insurance more affordable for everyday New Yorkers,” Paterson said in a statement. “More than two million of our residents do not have health insurance, partly because of the high cost of coverage for businesses, individuals and families. We must take the necessary steps to improve our broken health care system. By making insurance coverage more accessible, we bring people into the system before they need emergency treatment, reducing the overall cost of health care to the entire state.”

Paterson’s bill expanding dependent coverage comes shortly after Pennsylvania’s General Assembly passed a similar measure onto Gov. Ed Rendell.

In the New York bill, unmarried children through age 29 – regardless of financial dependence – would be covered under their parent’s group health policy.

Paterson’s office said young adults ages 19 to 29 represent 31% of New York’s uninsured population and often become ineligible for coverage upon high school or college graduation, finding themselves in entry-level jobs without employer-based coverage.

Among some of the managed care reforms Paterson is calling for are those that would “cut some of the red tape that results in appropriately delayed or denied claims,” his office said.

They include prohibiting insurers from treating an in-network provider as out-of-network simply because the referring provider was out-of-network; limiting health insurers’ ability to make administrative or technical denials of payment for otherwise medically necessary services; and reducing the time insurers have to review requests for post-hospital care.

Insurance Superintendent Eric Dinallo said Paterson’s legislative package “includes substantial reforms that will have a real impact on New Yorkers, allowing those who currently cannot afford health insurance to obtain coverage.”

In addition, these proposals will benefit businesses which pay for group coverage for their employees,” Dinallo said.