New York is now the second-costliest state for employer-sponsored health insurance after its premium costs increased at more than three times the national rate in 2015, according to a recent report from the Empire Center, citing federal data. The average single-coverage premium in New York last year hit $6,801, second only to Alaska, at $7,807, […]
New York is now the second-costliest state for employer-sponsored health insurance after its premium costs increased at more than three times the national rate in 2015, according to a recent report from the Empire Center, citing federal data.
The average single-coverage premium in New York last year hit $6,801, second only to Alaska, at $7,807, according to Medical Expenditure Panel Survey statistics from the Agency for Healthcare Research and Quality. The U.S. average single-coverage premium was $5,963.
New York single premiums jumped by 7.8 percent last year, compared to a 2.2 percent rise nationally.
The average family premium in New York reached $19,630 in 2015, compared to a national average of $17,322.
“Premiums have long been high in New York, but the problem shows signs of getting worse. The affordability gap between New York’s single coverage prices and the national norm surged to 14 percent in 2015, the highest in at least two decades,” Bill Hammond, director of health policy at the Empire Center, writes in a July 14 posting on the NYTorch blog (www.empirecenter.org/publications/new-yorks-health-insurance-costs-surge).
New York had the 10th highest health-insurance premiums in 2010 and 18th highest in 2003.
“The trend comes in spite of aggressive price regulation by the state Department of Financial Services, under a so-called prior approval law that was reinstated in 2010. In each year since, regulators have cut nearly every rate increase requested by health plans, sometimes by more than half,” Hammond notes.
The prior-approval law applies to only some of the health-insurance market: policies bought by individuals and small businesses, including those purchasing coverage through the state exchange established under the national health law.
Most large employers’ health benefits are exempt from state oversight under federal law, according to Hammond.
Despite that, New York’s small businesses paid, on average, 16 percent more in health premiums in 2015 than small businesses nationally. New York employers as a whole faced 14 percent higher premiums than national employers.
“The ineffectiveness of prior approval [policy] suggests that what’s driving the state’s unusually high premiums is not health plans’ pricing decisions in a competitive marketplace, but the costs they face. These include New York’s steepest-in-the-nation taxes on health insurance and Albany–imposed coverage mandates that add an estimated 12 percent to the typical premium,” Hammond wrote.
He believes New York State regulators “face a dilemma.” If they approve big rate increases sought by insurers, coverage will become even less affordable for small businesses and individuals shopping on the state insurance exchange.
But if regulators keep rejecting premium increases, health insurers could choose to leave the New York state insurance market for small businesses and individuals, exacerbating the lack of supply of affordable health plans.
The Albany–based Empire Center — which calls itself an independent, nonprofit, nonpartisan think tank — generally focuses its research on the issues of government spending and taxes in New York.
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