The New York State Department of Financial Services (DFS) released its final decisions on the rate review process (Don’t remember what that is? Check out our blog post about it here). The 17 carriers on the individual insurance exchange were approved for a weighted average premium increase of 7.1%, which is 3.3% lower than requested by the plans. These figures mask considerable variation among plans; Health Republic, Empire HMO, Emblem HIP, and MVP Health Plan were all approved for double digit rate increases, while United and Oxford OHP had their requests cut by 20.4% and 17.6%, respectively. New York’s individual market has more choices than most other states, so it behooves consumers to shop around to get the best deal for themselves and their families in this upcoming open enrollment period, beginning November 1, 2015.

While the New York State Health Plan Association condemned DFS’s approved rates as too low, their customers can’t help but compare their 7.1% increase to the much lower 4% rate increase California allowed for 2016. As HCFANY described in its rate comments, New York’s proposed and now adopted rate increases exceed the national rate of medical cost inflation predicted by independent analyses; considerably exceed growth in wages, according to the most recent Employment Cost Index released by the Bureau of Labor Statistics; and they are significantly higher than the average rate increase of 5.7% approved by DFS last year.

We recognize that some plans had seriously underpriced premiums in the past and are facing financial difficulties.  DFS has a challenging balancing act to perform.  DFS correctly notes that its rate reductions will still keep premiums 50% lower than they were before the launch of the New York State of Health marketplace. All told, the prior approval process will save New York consumers $430 million in premiums for 2016.  Unfortunately, the price hikes will still hurt.