Prior approval law saves New Yorkers $500 million

Yes folks, it's the Hoover Dam!

A press release issued by Governor Cuomo’s office yesterday announced that New Yorkers will save over $500 million on health insurance premiums this year thanks to the Department of Financial Services’ (DFS) utilization of the State’s prior approval law.  As you may remember, New York’s 2010 prior approval law allows DFS officials to review insurance rate increases before they go into effect and scale them back if they are too high.

Health insurers had requested overall increases averaging around 12.4%, which were then cut down to an average of 7.5% by DFS.  Rate increases for small group plans will increase an average of 9.5%, down from the average 15.7% increase requested by the insurance plans.  Prior to passage of the prior approval law, annual premium rate increases averaged 14%.

These modest increases stand out at a time when many states are experiencing double-digit increases in premiums.  For example, an article in Saturday’s New York Times notes that states like Florida and Ohio have seen rates rise by as much as 20%, with similar rate increases proposed in California.

The Affordable Care Act requires states to review any proposed rate increases above 10%, however New York is one of 37 states which allows state officials to deny excessive rate increases (an issue that is explored further in the Times article).

So, thanks again to our Senate Democrats who really championed this issue back in 2010 and made savings like this possible today.  We appreciate the work you do!!!

See below for a breakdown of the average requested rate increase and what the DFS ended up actually approving.  For the full list of increases by insurance plans, see the Governor’s press release.


Health Insurance Market Segment
Total Number
of Members Affected
Requested Annual Rate Increase (Weighted Average)
Approved Annual Rate Increase (Weighted Average)
Reduction by DFS
Individual, direct-pay
Small Group
Large Group
Medicare Supplement

Click here to read the Governor’s press release.

Click here to read the NYTimes article, titled “Health Insurers Raise Some Rates by Double Digits.”



On Monday, October 1, New York State selected the benefits of the State’s largest small group plan, Oxford EPO, as the Essential Health Benefits (EHB) benchmark plan.

The state also outlined the coverage areas in which the Oxford plan’s benefits will be supplemented to meet ACA requirements:

  • Pediatric dental/vision coverage – NYS will supplement the Oxford plan’s benefits with the current pediatric dental/vision benefits offered through NY’s CHIP coverage.
  • Habilitative services – will have parity with rehabilitative services.
  • Mental health/substance abuse parity – benefit limits in the Oxford plan will be removed.
  • Annual/lifetime dollar limits – quantitative limits will be substituted when further federal guidance is available.

As we explained in our August 13 post, the selected benchmark EHB will apply to all non-grandfathered plans both inside and outside the State Health Insurance Exchange (the Exchange), as well as the benefits included in a Basic Health Plan, if New York implements such a plan.

In our written comments to the State, HCFANY urged the State to select the New York State Employee Plans’ Empire Plan, which has more comprehensive benefits than the Oxford plan. Among other differences, the Empire Plan covers adult dental care, and covers some services (like physical therapy and speech therapy) according to medical necessity rather than limiting those services to a set number of visits.

The State balanced value to consumers and small business employees of the more comprehensive benefits with the predicted additional cost these benefits would add to premiums. According to Milliman, the consultant that studied the EHB benchmark options for the State, selecting the Empire Plan would add $15 more to monthly premiums than selecting the Oxford plan would. The complete report by Milliman on EHB is available here.

The State received extensive feedback, including 60 written comments from the public.  Some of the comments, like this comment from the Hemophilia Association of New York, urged the State to select the Empire Plan because consumers need comprehensive coverage. Others, including this comment from the New York State Conference of Blue Cross and Blue Shield Plans urged the State to select an Oxford plan to keep premiums lower.

Input at the Regional Advisory Committees was similarly mixed, with stakeholders including carriers and small business advocates urging the State to keep premiums low, and stakeholders including consumer advocates urging the State to choose a more comprehensive benefit package.

While consumer advocates are disappointed in the State’s decision, there are some consolations for consumers:

  • The EHB will serve as a floor, not a ceiling, for benefits offered by individual and small group plans in New York.
  • The EHB will raise the floor for many New York consumers, including consumers who currently have coverage through Healthy NY plans.
  • Benefits that are not covered by the EHB, like adult dental, will be available through more comprehensive plans or coverage riders.
  • The EHB decision may be revisited for 2016.

HHS will offer the public one more opportunity to comment on this decision through a Notice of Proposed Rulemaking. We will keep you posted about opportunities to comment at that time.

On May 11, 2010 HCFANY and fellow advocate groups will discuss what health care reform means for New York and how it will be implemented.

Join us from 11 AM- 3:30 PM at the Westminster Presbyterian Church (85 Church Street) in Albany.

Today, HCFANY submitted written testimony on the 2010-2011 Executive Budget.

HCFANY supports the following budget measures:

  • The Governor’s original budget proposal to enhance accountability funding for charity care (withdrawn in the Governor’s 21-day amendments).
  • The restoration of prior approval to the State Department of Insurance of health insurance premium increases.
  • The simplification of public insurance enrollment.

HCFANY opposes:

  • Any increase in co-payments to the Family Health Plus Employer Buy-In program as a stand-alone measure to reduce the program’s premiums;
  • Efforts to continue state funding for limited coverage under Healthy New York at the expense of the State’s more comprehensive individual direct pay market;
  • The elimination of important task forces, such as the Medicaid managed Care Advisory Panel (MCCARP).

Aside from these reservations, HCFANY believes that this Executive Budget lays an important initial foundation towards meeting our goal of affordable, comprehensive health coverage for all New Yorkers.