Rate Review Comments Due Sunday – Check Out Ours!

Health insurers in New York are asking for rate increases again this year: in the individual market an average of 8.4 percent and in the small group market, an average of 12 percent. UnitedHealthcare of New York asked for the biggest increase in the individual market (27.1 percent), while HealthPlus (Empire) asked for the smallest (2.4 percent).

In New York, insurance premium changes in the individual, small group, and Medicare Advantage markets are subject to prior approval. That means the state has to review their justifications and decide if they are asking for a reasonable change. The data provided to the Department of Financial Services, which regulates health insurance in New York, are available publicly and the public is able to post their own comments. HCFANY submits comments each year assessing whether or not the carriers are asking for reasonable changes. If not, we ask the Department of Financial Services to reject their requests. You can see the letters we wrote last year here. DFS wants to hear from you, too! You can find a guide for submitting your own comments here. The comments are due by June 28 – you can find your insurance company’s application here.

The requests are much smaller this year in the individual market than they were last year. This reflects the success insurers had in 2018. Nationally, this was the most successful year yet for the individual insurance marketplaces created by the Affordable Care Act (ACA).[1] The ACA remains in place despite federal efforts to sabotage the law – and states like New York have worked hard to counteract that sabotage, which creates a more stable environment for insurers.

One sign of this success is that insurance companies owe customers about $800 million in rebates because their medical costs were so much lower than the premiums they collected. The ACA requires them to spend at least 80 percent of their income on medical services – instead, they only spent 70 percent. The average medical loss ratio for the major carriers applying in New York was 85.4 percent, just above the state’s minimum of 82 percent. Four New York carriers failed to meet the state threshold.

Even though the request is smaller than past requests, it is hard for consumers to manage any premium increase. New Yorkers increasingly report that they cannot afford health care, even when they buy insurance. Many New Yorkers get assistance with insurance premiums through the Affordable Care Act and so won’t be affected – but those that don’t get assistance cannot manage another increase. Your voice matters in New York – while the Department’s decisions must be based on the information provided by the insurers, your stories about managing (or not managing) premium increases over the past few years add valuable information to public discussions about health care in New York. New York will only develop good solutions to our affordability crisis by listening to all voices – we need to hear from you!

[1] Cynthia Cox, Rachel Fehr, and Larry Levitt, “Individual Insurance Market Performance in 2018,” Kaiser Family Foundation, May 7, 2019, https://www.kff.org/private-insurance/issue-brief/individual-insurance-market-performance-in-2018

A new survey found that most New Yorkers still struggle to afford healthcare and are worried about affording care in the future. This probably isn’t news to many of us – but the findings make the state budget’s lack of action on health care even more glaring.

New York has traditionally been a healthcare leader, and we have one of the lowest uninsured rates in the country. But insurance isn’t enough. Many of the survey questions were asked of insured New Yorkers. They are having trouble managing the costs of their premiums, co-pays and deductibles.

The survey shows the toll this takes – almost half of New Yorkers (45 percent) have avoided care or taken drastic actions like cutting pills in half or not filling prescriptions. Over a third of New Yorkers (35 percent) reported serious financial repercussions including using up all or most of their savings, being put in collections, or being unable to pay for food, heat, or housing on top of medical bills.

New Yorkers from upstate and downstate and from both political parties want government action on healthcare costs.

New Yorkers blame health plans, the pharmaceutical industry, and providers like hospitals almost equally. They are ready for the government to step up and do something. But the only proposal in the governor’s budget that could address costs is one that would license pharmacy benefit managers. That’s a great start in reining in prescription drug costs, but it’s a step many other states have already taken. The state could do a lot more to help New Yorkers manage this problem, including a state premium assistance program, a drug utilization board that could set prescription drug rates, or creating a public option for the lowest-income people in the individual market (see our budget testimony here for more information).

The New York Health Act would create a single-payer public program that provides health coverage for all New Yorkers.  Last week, RAND released a report finding that the bill is financially feasible. This is a big deal because single payer efforts in other states have floundered due to cost concerns. The savings weren’t huge – the researchers estimated total health spending would only decrease by 2-3 percent. But the program would provide universal health coverage in New York, which many have believed would cost much more than our current system.

The researchers estimated that individuals making between $13,350 and $133,500 (or households of four making between $27,610 and $276,100) will spend less of their income on health care under the New York Health Act.

A single-payer system would mean providers, like hospitals, doctors, and pharmacies, get paid directly by one state program. Patients would not pay anything when they receive care. Instead they would have to pay a new tax based on income. Employers and employees would split it, as they do now with premiums. The RAND researchers found that most New Yorkers would save money by paying the tax because they would no longer pay for premiums, deductibles, or co-payments.

Single-payer is one of two models of achieving universal health coverage. The New York Health Act is most similar to the models used in the United Kingdom and Canada. In those countries, most care is paid for through one government program. Private insurance still exists to supplement the national program, but it is a small part of their health care systems. Like Canada’s system, care under the New York Health Act would still be delivered by the private sector (in the United Kingdom care is largely delivered at public clinics and hospitals).

The Affordable Care Act (ACA) was based on the other model for achieving universal coverage, one that includes a bigger role for private insurance. In those countries, people get subsidies to buy coverage, benefits are standardized, and there are penalties for people who do not purchase insurance. Private insurers collect premiums and pay providers. Insurers are not allowed to deny coverage to people with pre-existing conditions. The ACA helped New York cut the number of people without insurance in half, to only 5 percent of the population. That’s a great achievement, but closing that gap is important.

A benefit of a single-payer program is that it would be much simpler for consumers and providers. Its simplicity is one reason the RAND researchers found it would reduce spending overall. Private insurers offer dozens of plans with slightly different benefits and with different fee schedules, which makes billing very complex. Providers also have to develop administrative systems for dealing with many sources of payment. Those costs would go away. The state would still be responsible for some administrative costs but our existing public programs have relatively low administrative costs compared to private insurers.

The RAND researchers also found that the system would save money because the program would have more purchasing power than any private insurer or even large programs like Medicaid. That should mean better prices for things like medication, for the same reason that places like Costco that sell bulk goods can charge less.

Details are incredibly important in health care, as any consumer who’s dealt with a claim denial or billing error can explain. That means there is still a lot of work to do before New York can realistically develop this single payer program. However, the new report means there is new energy for figuring out those details. To learn more about the bill, check out the Campaign for New York Health’s website.

In a recent blog post, we explained how New Yorkers can comment on the rates their insurers have requested for 2019. You can read that blog post here. The deadline for submitting comments is Sunday, July 1 so there isn’t very much time left.

Comments can be submitted electronically here. And you can find our letters for each individual carrier below. HCFANY submits very detailed comments – yours do not have to include the technical analysis you see in our letters. It’s important for consumers to speak frankly about how premium increases affect their households. Maybe you have to decide between health insurance and other necessities. Maybe you are considering not buying insurance. Maybe your insurer keeps giving you fewer choices of doctors even as you keep paying more. All of these issues need to be discussed publicly in New York.

This year HCFANY  asked the Department of Financial Services (DFS), which is responsible for regulating insurance and reviewing the rate applications, to help convene a workgroup to talk about strategies the state can use to control premiums. The rate review process allows DFS to reduce premium requests every year, but more needs to be done.

Comments on all 12 of the carriers who applied for the individual market are below: