New York's health insurance companies are seeking premium rate increases averaging 16.6% in the individual market and 11.5% in the small group market next year.
The Cuomo administration is reviewing the requests published last week on the website of the Department of Financial Services, which ultimately sets each insurer's rate.
Insurers have complained that the state in recent years has kept rates artificially low. But it's a balancing act. Premiums that are too low can drive insurers out of the market or, in the case of Health Republic Insurance of New York, bankrupt them when premiums don't cover costs.
However, that delicate balance could be thrown out of whack this year if Gov. Andrew Cuomo makes good on his threat last week to ban insurers that leave the marketplace set up under the Affordable Care Act from participating in Medicaid. Insurers have questioned the legality of Cuomo's directive. The Democrat has moved to maintain the Obamacare exchanges, where nearly a quarter-million New Yorkers get their insurance.
UnitedHealthcare is looking for the biggest premium rate hike in the downstate area: 38.5% for plans in the individual market. Last year it sought a 45.6% increase, but the state granted it a hike of 28%.
On the lower end, NYC Health and Hospital's Metro-Plus requested a premium rate increase of 7.9%. Last year MetroPlus asked for an average increase of 20.3% across its plans. The state ultimately increased that request to 29.2%
That decision was atypical, according to data compiled by the New York Health Plan Association. In fiscal 2015 through 2017, the Department of Financial Services approved rate increases for individual and small-group plans that averaged 16% to 59% lower than the rates requested.
Fidelis Care, the state's leader in private health plan sales this year, with about 32% of the market, is asking for an 8.5% rate hike across its plans. Last year Fidelis asked for a 13% increase and was granted an 11.6% rise.
The Health Plan Association last month said that rising health care costs would drive insurers to once again seek double-digit premium increases. But expectations that the companies are unlikely to get everything they're asking for also played a role.
"The year has changed, but the story is the same," Paul Macielak, president and chief executive of the association, said in a statement at the time. "Just as troubling as the underlying cost drivers is the other recurring theme here in New York, where the Department of Financial Services reduces the average requested increases."
Additional reporting by Jonathan LaMantia.
"Insurers seek double-digit health premium increases" originally appeared in Crain's New York Business.
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