Health insurance premiums on New York's state-run exchange will go up by an average of 7.1% next year. But rates differ greatly by payer, plan type and region, highlighting the difficulties of relying on crude averages.
For example, Oxford Health Plan enrollees will see their monthly premiums drop 12.3% in 2016, whereas people with Health Republic Insurance of New York will have to pay 14% more. A recent Kaiser Family Foundation analysis also found that the second-lowest-cost silver plans, which are the benchmark for setting the Affordable Care Act's premium subsidies, will only increase by 0.5% next year in New York City.
“It's not all that surprising to see a wide range of premium increases,” said Josh Weisbrod, a partner at the healthcare practice of consulting firm Bain & Co. “This is the first year where the participating payers were able to use actual trend data on the exchange enrollees.”
Seventeen companies are selling health plans on New York's exchange next year, making it one of the most competitive markets in the country. Close behind is California, which announced last week that premiums will increase by 4% on average next year.
For some of New York's dominant exchange insurers, premiums will not jump sharply, if at all. Fidelis Care controls 20% of New York's exchange market of about 415,000 people, the most of any insurer in the state. But its premiums will only increase by 4.7% on average, according to the state's financial department.
MetroPlus Health Plan, which has a 7% market share, is lowering rates by 7% next year. The company lost members in New York City after it raised rates in 2015. MetroPlus will now offer the cheapest average silver plan in New York City next year, costing $369 per month.
Cynthia Cox, an associate director at the Kaiser Family Foundation who studies the ACA's exchange markets, said premium decreases show that insurers are reacting to evolving consumer habits. People in the individual market are slowly treating health insurance as a commodity, which may push insurers to keep prices competitive.
“A lot of exchange consumers were willing to shop around last year,” Cox said. “Some plans that raised their rates saw a decrease in their market share. It's possible that people can change plans much more easily now.”
Low premiums have been a pitfall for some. Health Republic, the state's not-for-profit co-op plan created with loans authorized by the ACA, has a statewide market share of 19%. Like many co-ops, Health Republic appealed to many people through its low prices. That led to higher-than-expected enrollment, but also larger-than-anticipated losses, according to HHS' Office of Inspector General. Health Republic lost $35 million in 2014, about seven times what it expected, and the rate hikes were approved to offset that deficit.
Weisbrod said health insurance remains a "hyperlocal" business and that premium rate increases or decreases are reflective of the specific geography. Cox added that instances of double-digit premium hikes are isolated. Her research shows rates are going up more in 2016 than the year before, but increases are still modest overall.
“It's not the doom and gloom,” Cox said.
Oscar Insurance Corp., a nascent insurer known for its emphasis on technology, gained a bigger foothold of the exchange market in the past year. Its enrollment share went from 1% to 5%, and the company will raise rates by 4.5% next year.