Insurers in New York
want to raise healthcare premiums by an average 13% next year, according to proposed rate filings under review by the state.The Department of Financial Services this week released the 2015 rate requests
filed by health insurance companies in New York that provide individual or small-group plans. Proposed changes in premiums range (PDF)
from cuts as great as 15.4% to increases as high as 29.82%.
But as New Yorkers have begun receiving notices that their insurance
rates may go up significantly next year, state officials are suggesting that consumers not panic quite yet.
“These are just the proposed rates, and they're often reduced through the prior approval process,” said Matt Anderson, spokesman for the state financial services commissioner, Benjamin Lawsky. “We're going to closely scrutinize the rates to make sure they're not unreasonable or unjustified.”
The wide variation in proposed rate cuts or increases is consistent with what is playing out in other states across the country. In Indiana, insurers want to hike rates by an average of 16%. But in Oregon, they want to decrease them by about 1.4%, on average. According to an analysis of proposed rates in nine states published last month by Avalere Health, the average proposed premium increase was 8%
for plans sold on the individual market.
In 2013, the last year before the exchanges went into effect, insurers in New York requested about a 12.4% weighted average rate increase, according to Anderson. But that was ultimately reduced to an average increase of 7% after the rates were reviewed by the state, he said.
A decision concerning final 2015 rates is expected by the end of August. At that time, subsidies also will be determined; those are linked to premiums.
Companies requesting rate hikes have cited escalating healthcare costs tied to an aging demographic, the rising cost of providing goods and services, increasing and intensifying care demands, Medicaid and Medicare reimbursement reductions, and higher prescription drug costs. And in New York, it's worse, according to Empire Blue Cross and Blue Shield
, which proposed rate hikes ranging from a low of 18% in the individual market to a high of 24% in the small-group market.
“New York stands out as an especially costly state in which to purchase healthcare,” according to Empire's rate filing. “A 2012 report by Milliman noted that the cost of care to be 118.4% of the national average.”
That is due in part, the insurer says, to the state's high length of hospital stays, poor healthcare price transparency, and the imposition of more insurance taxes and assessments than any other state.
“But it's also important to remember for the individual market that there was a 53% reduction in rates in New York given the impact of federal healthcare reform,” Anderson said. “We're starting from a much lower base.”Follow Rachel Landen on Twitter: @MHrlanden