The New York State Department of Financial Services (DFS) on July 31 announced an average health-insurance rate increase of 9.8 percent by insurance carriers in the small-group market. The DFS-approved rate increase was 32 percent below the insurance carriers’ average rate-increase request of more than 14 percent, DFS said. Overall, DFS cut insurers’ […]
The New York State Department of Financial Services (DFS) on July 31 announced an average health-insurance rate increase of 9.8 percent by insurance carriers in the small-group market.
The DFS-approved rate increase was 32 percent below the insurance carriers’ average rate-increase request of more than 14 percent, DFS said.
Overall, DFS cut insurers’ requested 2016 rates by more than 30 percent, or $430 million, in both the individual and small-group markets, according to a July 31 news release posted at the DFS website.
Rochester–based Excellus BlueCross BlueShield, the largest health insurer in Central New York, had requested a rate increase of 13.9 percent in its small-group plan, according to the data provided in the release. DFS reduced the Excellus increase to 10 percent.
Schenectady–based MVP Health Care had requested a rate rise of nearly 7.3 percent, which DFS reduced to 6.3 percent.
New York City–based Emblem Health, which operates a customer and support-services center in DeWitt, asked for an increase of nearly 30 percent in its small-group plan, and DFS approved the request.
Hartford, Connecticut–based Aetna Life had requested a nearly 24 percent rate increase, which DFS reduced to nearly 21.5 percent.
Individual market
The state announcement also listed insurance-rate increases for plans in the NY State of Health, the state’s official health plan marketplace or exchange.
On average, insurers requested a 10.4 percent rate increase in the individual market. DFS reduced the average increase by more than 30 percent, to 7.1 percent, which is below the average increase in health-care costs of about 8 percent, the state says.
DFS cites reductions in a federal reinsurance program as a factor for about half of the rate increase.
Premiums for individuals remain “nearly 50 percent lower” than prior to the establishment of the state’s health-benefit exchange in 2014, even before adjusting for inflation or federal financial assistance that is available to many consumers purchasing insurance, the agency contends.
To be sure, New York state had a tiny, almost non-existent individual health-insurance market with high rates before the state health exchange arrived.
For the coming plan year, Excellus had requested a nearly 13 percent rate increase in the individual market, which DFS reduced to nearly 6 percent.
MVP Health Care sought a rate hike of nearly 13.5 percent, but DFS approved an increase of about 10 percent.
The next NY State of Health open-enrollment period begins on Nov. 1 for coverage starting on Jan. 1, 2016, according to DFS.
Explanation
DFS says it “closely analyzed” each health insurer’s request and cut rates that it contends were “excessive or unreasonable,” Anthony Albanese, acting superintendent of financial services, said in the DFS news release.
He said, “… underlying increases in medical costs continue to be the primary factor contributing to the cost of insurance. We are working closely with the [New York State] Department of Health on reforms to the health-care payment and delivery system, including efforts to shift away from the costly ‘fee-for-service’ model. It is vital that we continue to attack the underlying factors driving up health-insurance premiums in order to bring better care to patients at lower costs.”