Premiums in New York will increase this year for people buying plans in the individual and small group markets. But thanks to our public rate review process, the increases are smaller than what carriers requested. Carriers asked the Department of Financial Services (DFS) to approve an average 18 percent increase (learn more about rate review here). After reviewing their requests and public comments (including ten letters submitted by HCFANY), DFS approved an increase of 16.6 percent for the individual market and 8.3 percent for the small group market. DFS estimates that this will save consumers $302 million in 2017.
While any premium increase is difficult for consumers to bear, rate review limits increases to those that are necessary because of legitimate cost trends in the health insurance market. Other states also have a rate review process, but New York’s is special because it allows public participation. Carriers who want to sell insurance in our marketplace have to publicly justify their requests for premium increases. And the public can tell the decision-makers at DFS exactly how premium costs impact their lives. Rate review can’t eliminate all premium increases, but for the third year in a row, it has reduced them (we blogged about previous results in 2015 and 2014).
Consumers who are concerned about high premiums should remember that these average increases will not necessarily result in large increases for individuals, because most individuals who purchase marketplace plans receive premium subsidies. Premium increases should also be considered in context. The Affordable Care Act (ACA) did not eliminate premium increases, but it did successfully slow them down. Consumers are paying lower premiums today than was projected pre-ACA and are getting plans that offer significantly better benefits for their money.
Additionally, concerned consumers should take advantage of the Marketplaces created by the Affordable Care Act to shop around. Thanks to the New York State of Health, it has never been easier for consumers to compare their health insurance options. And every New Yorker can find local, in-person enrollment assistors to help make the best choice. Rate review is one of your tools for keeping premiums down in New York – open enrollment, which starts November 1, is another.