N.Y. exchange plan rates will be 50% lower

New York insurance regulators today approved rates for health plan offerings on the state insurance exchange in 2014 that they say are on average more than 50% less than premiums for currently available individual-market plans.

For example, for an individual seeking coverage in Manhattan on the New York Health Benefit Exchange in 2014, a standard HMO Aetna plan that currently has a premium of $1,409 a month would cost $688 for an Aetna gold-tier plan. That does not take into account what customers would actually pay if they qualified for federal premium subsidies for lower-income people.

Seventeen insurers received approval for individual-market plan offerings and rates for the New York exchange, including Aetna, United Healthcare, Empire Blue Cross and Blue Shield, and North Shore-LIJ, a hospital-sponsored plan. Participating insurers include seven entering the state's commercial insurance market for the first time. Some of these previously focused on offering Medicaid managed-care plans.

The lower-than-expected rates were good news for supporters of Obamacare, following warnings that not enough insurers would offer exchange plans and that rates would come in too high to appeal to consumers. But New York was expected to be one of the few states around the country where exchange plan rates might be lower than current rates, because the state already requires insurers to accept all customers regardless of pre-existing medical conditions and sharply limits pricing based on age and health status.

“New York's health benefits exchange will offer the type of real competition that helps drive down health insurance costs for consumers and businesses,” said Gov. Andrew Cuomo, who established the state exchange by executive order last year.

State officials project that as many as 615,000 New Yorkers will obtain coverage through the state exchange.

Meanwhile, California this week approved rates on its state exchange for health plans offered by 13 insurers. Approved premium rates for individual-market plans ranged from just above 2013 premiums for some insurers to significantly lower rates for others.

Follow Jonathan Block on Twitter: @MHjblock