State approves rates for 17 health insurers in upcoming benefit exchange

New York Gov. Andrew Cuomo today announced that the Department of Financial Services (DFS) has approved health-insurance plan rates for 17 insurers seeking to offer coverage through the New York Health Benefit Exchange.

 

The state approved the rates for health plans that serve subscribers in Central New York, including Excellus BlueCross BlueShield (BCBS), the region’s largest health insurer.

 

DFS also approved the rates for Schenectady–based MVP Health Care; Minnetonka, Minn.–based UnitedHealthcare; Hartford, Conn.–based Aetna, Inc.; and Albany–based Capital District Physicians Health Plan, Inc.

 

The state exchange will organize the plans in four metal tiers (bronze, silver, gold, and platinum), which is supposed to allow consumers and businesses to make a comparison.

 

The plans within each metal tier will have standardized contract terms and product offerings, which is meant to encourage price competition among insurers, the governor’s office said.

 

Previously, New York insurers offered more than 15,000 plans that “widely varied” in the level and quality of coverage provided, which encouraged “competition through confusion” and made it difficult for purchasers to effectively compare plans side by side, the governor contends.

 

On average, the approved 2014 rates for the highest tier of plans that individual New York consumers could purchase on the exchange (gold and platinum) represent a 53 percent reduction compared to last year’s direct-pay individual health-insurance rates, the governor’s office asserts.

 

The state attributes the lower rates to the expected rise in uninsured New Yorkers buying coverage in the individual health-insurance market due to the health-care law’s mandate that individuals purchase insurance starting next year. New York’s current individual health-insurance market is relatively small.

 

The state also notes that the 53 percent reduction does not include the effect of federal subsidies for individuals meeting certain income thresholds who are purchasing coverage on the exchange, which could lower their costs even further.

 

Health-care insurance costs per capita in New York currently run about 18 percent higher than the national average, as the state mandates that insurers cover pre-existing conditions and a variety of medical conditions and services not mandated in other states, while not currently requiring individuals to buy health insurance.

 

But the average approved rates for the benchmark individual “silver plan” in New York in 2014 would be in line with (or nearly 10 percent lower) than the nationwide average that the Congressional Budget Office (CBO) previously forecast for the full implementation of the federal health-care reform law, Cuomo’s office said.

 

For approved 2014 small-group plan rates, existing premium rates do not provide a functional year-over-year comparison, the state asserts.

 

In 2013, insurers offered more than 15,000 different small-group plans that significantly varied in terms of the quality and level of coverage provided. This year, insurers are offering standardized contracts and product offerings within metal tiers (bronze, silver, gold, and platinum), the state said.

 

The approved small-group rates, however, are “generally lower” than indicated by the estimates of other independent forecasters, the governor’s office contends.

 

The average approved small-group rate in New York for the benchmark “silver plan” is “well below,” or nearly 32 percent lower, than the nationwide average previously forecast by the independent CBO, notwithstanding the “relatively higher” per capita health-care costs in New York compared other states, according to the governor’s news release.

 

A number of small businesses will be eligible for tax credits that would lower those premium costs even further, according to the governor’s office.

 

 

 

Contact Reinhardt at ereinhardt@cnybj.com