The private companies selling individual plans in the New York State of Health insurance marketplace had requested rate increases averaging 24 percent. The state department with oversight of the market announced Aug. 3 that the rates will instead increase by an average of 8.6 percent.
The New York Department of Financial Services (DFS) reviews the proposed rate hikes each year and can adjust them. This year, the rates were cut more than 60 percent from what insurers had requested.
Insurers had blamed the premium spikes on uncertainty in the market introduced by the repeal of the individual mandate, a provision of the Affordable Care Act. The individual mandate placed a tax penalty on individuals without health insurance coverage, but the federal 2017 Tax Cut and Reform Bill eliminated the actual tax penalty effective at the start of next year.
A week before the DFS announcement, Gov. Andrew M. Cuomo directed the department to block any proposed rate increase attributed to the loss of the individual mandate.
“Insurance premiums must be based on actual cost and not political manipulations,” he said during a July 30 speech in Manhattan.
“If we allowed that rate increase to go through, it would be hundreds of millions of dollars as a bonanza to the private insurance companies,” Cuomo added. “It would increase the cost to normal hardworking families. We’re not going to let it happen.”
DFS Superintendent Maria T. Vullo said the reduction would save consumers $314 million.
“These rate decisions reflect New York’s robust market in the face of federal attacks and increased health care and pharmaceutical costs,” Vullo said in a statement announcing the approved rate hikes. “DFS will not allow the federal government’s wrongful repeal of the individual mandate penalty to become a self-fulfilling prophecy to make health insurance unaffordable in New York.”
About 1.4 million New Yorkers purchase individual or small group commercial health insurance plans through the state exchange: 330,000 New Yorkers through individual commercial plans, according to the state press release, and more than 1 million in the small group market for companies with 100 employees or fewer.
Average premiums for plans on the small group market will increase 3.8 percent, cut from an average request above 7 percent.
In Westchester County, there are about 15,000 people who bought qualified health plans on the individual exchange for 2018, according to enrollment numbers published in May.
Westchester residents purchasing in the individual market have six companies to choose from: EmblemHealth, Empire Blue Cross Blue Shield, Fidelis Care, MVP Health Plan, Oscar and UnitedHealthcare.
Fidelis has the largest share of Westchester customers at just under half. The company was approved for a premium increase of 13.7 percent, more than halved from its requested rate increase of 38.6 percent, which was highest among all insurers. Fidelis covers about 40 percent of all qualified health plans in the state.
EmblemHealth, which has 20 percent of Westchester’s market, requested an increase of 31.5 percent but was approved for 17 percent. MVP Health Plan, which carries 15 percent of all Westchester qualified plans, was approved for a 1.9 percent increase after filing for an increase of 6.5 percent.
Oscar and UnitedHealthcare each represent less than 10 percent of Westchester’s qualified health plan market. The companies were approved for rate hikes of 11 percent and 1.5 percent, respectively, each cut significantly from requests above 20 percent. Empire Blue Cross Blue Shield, also representing less than 10 percent of the county’s qualified health plans, was approved for no rate increase, 0 percent, after filing for a premium increase of 24 percent.
Eric Linzer, president of the New York Health Plan Association trade group, said the insurers’ requests from May were reasonable and reflected rising medical costs as well as uncertainty from the repeal of the individual mandate.
Responding to the state’s rate announcement, he said, “(T)he rate review process should be free from political considerations, focused on economics and actuarial data. We are concerned about the impact the rate reductions will have on the stability of the marketplace and may necessitate higher increases in future years.”
Here’s the full list of rate changes:
|Company Name||2019 Requested Rate Increase||DFS Final Approved 2019 Rates|
|Crystal Run Health Plan LLC||15.7%||10.1%|
|Empire Healthchoice Assurance||24.0%||0.0%|
|Fidelis (New York Quality Healthcare Corp.)||38.6%||13.7%|
|Healthfirst Insurance Company Inc.||15.0%||8.8%|
|Healthfirst PHSP Inc.||15.0%||9.5%|
|Healthnow New York||-3.2%||-3.2%|
|MVP Health Plan||6.5%||1.9%|
|UnitedHealthcare of New York Inc||23.6%||1.5%|
Small group market
|Company Name||2019 Requested Rate Increase||DFS Approved 2019 Rate Increase|
|Crystal Run Health Insurance Co.||11.5%||8.9%|
|Crystal Run Health Plan LLC||12.5%||9.8%|
|Empire Healthchoice Assurance||6.0%||5.0%|
|Healthfirst Health Plan Inc.||21.0%||16.0%|
|Healthfirst Insurance Company Inc.||7.0%||6.4%|
|Healthnow New York||-0.1%||0.3%|
|MVP Health Plan||7.0%||6.6%|
|MVP Health Service Corp||10.3%||9.1%|
|Oxford Health Insurance Inc,||8.3%||3.0%|
|UnitedHealthcare Ins Company of New York||7.2%||-1.0%|