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Insurance providers oppose guaranty fund in state budget proposal: Why?

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  • Staff Report 

Health insurance providers in New York are opposing a proposed guaranty fund included in Governor Kathy Hochul’s budget proposals, which would impose additional costs on health insurance companies to cover potential insurer defaults. Providers argue that the fund would primarily affect small, not-for-profit insurers in upstate New York, and that the state’s existing regulations make the additional fund unnecessary. Currently, New York is the only state without a guaranty fund for commercial health providers.


The guaranty fund aims to enhance protections for consumers with medical debt or those impacted by high medical costs. The fund would only be levied in the event of an insolvency and would be proportionate to the premiums written in the state. Department of Financial Services Superintendent Adrienne Harris argues that the fund supports consumers, not companies, and is in line with policies in the other 49 states.


However, providers counter that New York’s oversight of insurers through the Department of Financial Services (DFS) makes the proposed fund redundant. They claim it represents a broad approach to a narrow issue that affects a small number of New Yorkers, while increasing costs for health insurance providers.



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