The Department of Financial Services released its final 2022 rate decisions today, and once again our prior approval law has resulted in huge savings for New Yorkers. Individual market insurers requested an average premium increase of 11.2% this year. After reviewing their requests, DFS knocked that down to just 3.7%, a 67% decrease! That means consumers will save over $138 million in 2022. Small group plans requested an average rate increase of 14%, which was reduced to 7.6%. That reduction will save small business owners over $468 million in 2022.
In the individual market the biggest reductions were for Healthfirst (from a requested increase of 34.4% to an approved increase of 9.7%) and Highmark Western and Northeastern NY (from a requested increase of 18.1% to an approved increase 6.2%. Three plans will lower their rates in 2022: IHBC by 4.4%, MetroPlus by 3.9%, and Fidelis (by 0.1%). These final rates are an average across all the individual plans offered by each carrier.
“Prior approval” means that insurers submit requests to state regulators explaining what they plan to charge next year. The Department’s job is keeping premiums as low as possible while making sure that plans stay solvent. The rate applications include information on the plans’ costs during the current year (though this year they used 2019 data because 2020 was such an outlier) and assumptions the plans have about costs next year. DFS looks at this data and especially at the assumptions plans make to see if they are in line with other sources. For example, the plans provide an estimate of medical trend. Medical trend is the change in what plans spend on health services for members each year due to changes in prices for those services and how often members receive health care. DFS frequently disallows trend estimates that are too high with no justification. DFS has also capped profit in the past to keep rates down. For example, last year it capped profit at 0.5% for all plans.
Prior approval in New York is a public process and members of the public are able to submit comments on the rate requests. You can read our comments on each plan’s request here. This year, many commenters talked about the financial difficulties they are experiencing because of the pandemic. Others talked about paying higher premiums every year but struggling to find doctors and receive care. Some asked why costs aren’t going down given cheaper ways of providing care like telemedicine or the new customers plans will get in 2022 because of the American Rescue Plan’s higher premium subsidies. You can find your individual market plan and the public’s comments on it at these links: