Section 161. Health insurance

1. The president is hereby authorized and
  directed to establish a health insurance plan  for  state  officers  and
  employees  and  their dependents and officers and employees of the state
  colleges of agriculture, home economics, industrial labor relations  and
  veterinary  medicine,  the  state  agricultural  experiment  station  at
  Geneva, and any other institution or agency  under  the  management  and
  control  of  Cornell  university  as  the representative of the board of
  trustees of the state university of New York, and the state  college  of
  ceramics  under  the  management and control of Alfred university as the
  representative of the board of trustees of the state university  of  New
  York   and  their  dependents  which,  subject  to  the  conditions  and
  limitations contained in this article, and in  the  regulations  of  the
  president,  will provide for group hospitalization, surgical and medical
  insurance against  the  financial  costs  of  hospitalization,  surgery,
  medical  treatment  and  care,  and  may  include,  among  other  things
  prescribed drugs, medicines, prosthetic appliances, hospital  in-patient
  and out-patient service benefits and medical expense indemnity benefits.
    2.  Such health insurance shall not include expenses incurred by or on
  account of an individual prior to the effective date of the plan  as  to
  him or her; cosmetic surgery or treatment except to the extent necessary
  for  correction  of  damage caused by accidental injury while covered by
  the plan or as direct result of diseases covered by the  plan;  services
  received because of illness or injury arising out of or in the course of
  employment  and  entitling  the  individual to benefits under a workers'
  compensation  or  occupational  disease  law;  services  received  in  a
  hospital  owned or operated by the United States government for which no
  charge is made; services received for injury or sickness due to  war  or
  any  act of war, whether declared or undeclared, which war or act of war
  shall have occurred after the effective date of this plan; expenses  for
  which  the  individual  is not required to make payment; expenses to the
  extent of benefits provided under any employer  group  plan  other  than
  this  plan, and such other expenses as may be excluded by regulations of
  the president.
    3. The health insurance plan shall be designed by the president (1) to
  provide a reasonable relationship between  the  hospital,  surgical  and
  medical  benefits  to  be  included,  and  the  expected distribution of
  expenses of each such type to be incurred by the covered  employees  and
  dependents,  and  (2)  to include reasonable controls, which may include
  deductible and coinsurance provisions applicable to some or all  of  the
  benefits,  to  reduce  unnecessary  utilization of the various hospital,
  surgical and medical services to be provided and to  provide  reasonable
  assurance  of  stability in future years of the plan, and (3) to provide
  benefits on a non-discriminatory basis to the extent possible, to active
  members throughout the state, wherever located.