State OKs health insurance rate increases

More than 10 percent of state residents, or some 2.1 million people, have selected insurance plans through the state’s exchange, according to data released earlier this week by the state health department.

New York health insurance rates will jump an average of 7% in 2016, the state announced Friday.

Still, the region might experience a rate increase of almost six percent. Health plans have argued that rates need to rise to keep up with the increasing costs of health care, including expensive specialty drugs.

“We closely analyzed each insurer’s request and cut rates that were excessive or unreasonable”, said Anthony J. Albanese, acting superintendent of financial services. “The influx of new consumers into the health insurance market in recent years means that rates for individuals will continue to be almost 50% lower than before the creation of New York’s health exchange”.

What’s the reason? The actuary told me that medical costs, which drive a large chunk of the total premium, are up about one percentage point this year, and this increase appears to be greater than last year.

“Insurance premiums are a manifestation of the underlying cost of care“.

Macielak said insurers’ requests were based on the growing costs of healthcare, particularly for some specialty drugs. On the opposite end of the spectrum, DFS slashed UnitedHealthcare’s proposed 22% rate hike to a meager 1.65% increase. Small-group insurers will see an average increase of 9.8 percent in health-rates after insurers sought 14 percent increase. “The actions of the department bear ongoing security as we monitor the financial stability of plans in the marketplace”.

On the individual market, Empire HMO sought a 14.5 percent increase, and was approved for a 13.2-percent hike. For the Small Group market their request for a 13.9 percent increase was cut to 10 percent.

New Yorkers with incomes up to 400 percent of the federal poverty level ($47,080 for individuals and $97,000 for a family of four) are eligible for the state’s health exchange.

The next New York State of Health open enrollment period begins November. 1, for coverage starting January 1.