New York Insurers get 6.8% bump, say high medical costs are driving up rates


https://www.crainsnewyork.com/health-pulse/insurers-get-68-bump-say-high-medical-costs-are-driving-rates?utm_source=health-pulse-monday&utm_medium=email&utm_campaign=20190809&utm_content=hero-readmore

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Rates in the individual insurance market will increase by 6.8% on average next year—the lowest amount since 2015—as the state Department of Financial Services continued to beat the drum of affordability and reduce health plans’ proposed increases.

Insurers in the individual market had asked for 9.2% on average, and DFS trimmed those requests by about one-quarter.

DFS granted Centene’s Fidelis Care, which has the largest market share on the state’s Affordable Care Act marketplace, a 3.9% increase; the insurer had asked for 6.8%.

UnitedHealthcare, which offers one of the highest-priced plans on the marketplace, sought a 27.1% price bump and was approved for 15%, the greatest average increase among all plans.

Oscar had the second-highest rate jump, 14%, which was lowered slightly from its initial 15.4% average request.

EmblemHealth, a nonprofit insurer that has lost millions in recent years, received its full 13.5% price increase.

In the small-group insurance market, insurers were granted an average 7.9% increase in premiums after requesting a 12.2% bump on average.

The percentage increase each New Yorker experiences depends on their insurer, where they live, which product they choose and whether they qualify for income-based subsidies.

The rising premiums reflect increases in the prices of medical care and prescription drugs, said Eric Linzer, president and CEO of the state Health Plan Association.

“Every New Yorker deserves affordable coverage choices that provide them with access to high-quality care,” Linzer said. “Making that a reality requires addressing the underlying factors driving health care costs, particularly the persistent price increases by drug companies and providers.”

The average request of 9.2%, which differs from the 8.4% DFS reported insurers asked for in May, accounts for the inclusion of risk adjustment, a spokeswoman for the department said.

Health Care for All New York, a coalition of patient advocacy groups, said in June that more predictable medical costs in the individual market and excessive increases in past years made insurers’ requests for 2020 unjustified.

The persistent price increases in the individual market, as well as growing out-of-pocket costs for patients, have fueled proponents of a single-payer health system. But the Cuomo administration noted that New Yorkers who don’t get insurance from their employer are still better off than they were before the Affordable Care Act.

The state said that premiums in the individual market are still 55% lower than they were before the implementation of the Affordable Care Act without accounting for income-based tax credits that can lower the cost of insurance.

“This year marks the ninth anniversary of the Affordable Care Act’s passage and the fifth year since implementation, and we continue our strong efforts to support the ACA and combat unjustified federal attacks on the nation’s health care system,” DFS Superintendent Linda Lacewell said in a statement. “By reducing insurers’ rate requests, DFS is ensuring access to affordable health care and helping to maintain a robust, competitive marketplace.”

Elisabeth Benjamin, vice president of health initiatives at the Community Service Society, said state lawmakers must take more aggressive action to make health insurance affordable for New Yorkers. Such action could include price controls, state premium assistance, the creation of a public option or the adoption of a single-payer health system through the New York Health Act, she said.

“I think Superintendent Lacewell and DFS did the best that they could through the administrative tools they have—that is New York’s transparent prior approval process,” Benjamin said. “But at the end of the day, New York needs to do more to address the health care affordability crisis.” —Jonathan LaMantia

 

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