Life for NY’s health insurers just got a little more interesting
It is a great day for New Yorkers. The Cuomo Administration announced that it has slashed insurance companies’ proposed rate hikes by over 50 percent for people covered through the New York State of Health Marketplace and in the individual and small group markets.
“This is great news for consumers and small employers alike,” said Elisabeth Benjamin, a co-Founder of Health Care for All New York and Vice President of Health Initiatives at the Community Service Society of New York. “The Cuomo Administration has effectively applied the law to control premium costs—and this translates into $1 billion in real savings for New Yorkers.”
New York’s carriers had sought an average 12.5 percent rate increase on the rates individual consumers pay, but the Department of Financial Services approved an average 5.7 percent increase – consistent with the 4.2 percent rate increase approved by the Cover California’s Marketplace. Likewise, the Department cut the average 13.9 percent increase sought by carriers in New York’s small group market to 6.7 percent.
“This news proves the value of an open and transparent rate review process,” said Mark Scherzer, Legislative Counsel for New Yorkers for Accessible Health Coverage and co-Chair of HCFANY’s Policy Committee.
To view a chart of insurers’ approved rates by region, please visit DFS’ website.
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 |
52,383
|
+9.54%
|
+4.48%
|
-5.06%
|
| Small Group |
1,280,649
|
+15.77%
|
+9.59%
|
-6.18%
|
| Large Group |
611,780
|
+7.84%
|
+5.20%
|
-2.64%
|
| HealthyNY |
117,859
|
+24.84%
|
+11.81%
|
-13.03%
|
| Medicare Supplement |
319,722
|
+3.27%
|
+2.59%
|
-0.68%
|
| Overall |
2,382,393
|
+12.37%
|
+7.52%
|
-4.85%
|
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.”
That’s right – its health insurance rate review time! This means that our health insurance plans are now diligently submitting their proposed rate increases to the Department of Financial Services (DFS) for approval. Some of you may have already received a letter from your health plan letting you know that they plan to “adjust” your premium rate. Health plans are required to give you 120 days notice of any proposed rate increases (and 60 days notice before the approved increase goes into effect).
It’s up to DFS to decide whether the proposed rate increases are necessary. Comments and objections from policyholders and the public can be submitted for up to 30 days after a health plan submits its application for an increase. You can find any pending rate increase applications, and supporting documentation, on the DFS website by clicking here.
HCFANY is, of course, on top of this and is once again submitting comments on proposed rate increases. First on the agenda is Oxford/United Healthcare, which is requesting rate increases of between 15.1% and 46.5% for its various small groupproducts. After combing through the supporting documentation provided by the plan – particularly around medical trend and member migration – we are not convinced that that increases of this magnitude are necessary. Our recommendation to the DFS is that the proposed rate increases be denied.
If you’d like to submit your own comments to the DFS, you can do so online by clicking here, or via regular mail to:
Mr. Charles Lovejoy
Health Bureau
New York State Department of Financial Services
25 Beaver Street
New York, NY 10004
It’s getting to be that time of the year again, and we all dread to hear those three little words…”You’re being audited.” [cue scary Psycho knife sound]
Thankfully, it’s not consumers who have to worry this time – its our health insurers. The Department of Financial Services (DOFS) announced today that it will soon start performing random audits on New York’s health insurers to make sure that their rate filings are accurate, and to look for ways to control costs.
Basically, every year insurers send in requests for new rate hikes to the DOFS, and then submit loads of data that is supposed to justify why they need more money. The DOFS then has 60 days to review each insurer’s request and supporting documentation and make a decision. But, anyone who has been following this issue may remember that last fall the DOFS opened these rate filing docs up to the public – and they ain’t pretty (you can view them all here if you don’t believe me). You may well remember the infamous 28,000 page HealthNow rate application.
To help DOFS out, the US Department of Health and Human Services (HHS) has issued a $4.4 million grant to help strenghten the rate review process and make it work better for consumers and small buisnesses. For their part, DOFS has decided to hire an independent accounting firm to help them perform randomized audits on previously filed rate applications and their supporting materials.
This is a huge win for consumers and small businesses, and will bring greater accountability to the insurance industry, and more transparency into the rate review process. After all, if folks are being asked to pay more money each year for the same benefits, or sometimes even fewer, why shouldn’t we be 100% sure that these hikes are necessary?
- Click here to read HCFANY’s press statement, titled “Department of Financial Services to Perform Random Auditos of Health Insurer Rate Filings.”
- Click here to read news coverage from LoHud.com, titled “Insurers, HMOs will have to open financial books to state auditors.”
- To read more about the HHS grant, click here.