New York’s Prior Approval law protects consumers
Each year health insurance companies in New York submit applications to the Department of Financial Services (DFS) that explain their requests to raise, lower, or maintain the premiums they charge consumers for health insurance coverage. Thanks to a strong state law, New York’s DFS can reduce rate increases proposed by health insurers if they find the proposed rate is “unreasonable,” “excessive” or “unfairly discriminatory.” Under the 2010 Prior Approval law, DFS may review rates in the individual and small group (2-50) markets. Most proposed rate increases will go into effect on January 1, 2016.
DFS considers many factors when deciding whether to approve a rate proposal, including the costs of medical care and prescription drugs and the insurer’s past claims experience and financial condition.
Consumers, consumer groups, and small businesses can submit comments to challenge rate proposals that they believe are too high, but the time period to comment is extremely short. Comments must be submitted within thirty days after the insurer’s filing is posted on the DFS website.
The rate increases began to be posted on June 2. Check the DFS website (myportal.dfs.ny.gov/web/prior-approval/rate-applications-by-company) to get the exact deadline for your own health insurer. Many comments are due before July 2nd.
You can make a difference!
Last year, many consumers were faced with double-digit rate increase proposals, but consumers weighed in and the average rate increases were almost cut in half.
In 2014, DFS reduced the average proposed rate increase from 12.5% to 5.7% for consumers on the individual market and from 13.9% to 6.9% on the small group market, saving policyholders in New York an estimated $1 billion!
This year, many consumers and small businesses are again facing rate increases over 10%. The weighted average for rate increases is 13.5% on the individual market and 14.3% on the small group market. Increases like these can seriously cut into family budgets and small business owners’ ability to provide health care for their employees.
What You Can Do:
1. Write a comment challenging your rate increase. You can do this online, through the DFS web page, or you can send it in by regular mail. The DFS web page shows you how.
To comment online:
- Go to https://myportal.dfs.ny.gov/web/prior-approval/rate-applications-by-company
- Find your insurance carrier in the left column and click
- Go to “Pending Applications” and “Under Review” in the right column
- Click on your plan – IND for individuals and SG for businesses
- Create an account and leave a comment
2. Get others to submit comments
- Share our Policy Brief on rate review with friends and family: http://hcfany.org/resources/issue-brief-you-can-weigh-in-on-next-years-health-insurance-premiums/
3. Get the word out on rate review and the need to act by writing a letter to the editor or through social media.
- Sample tweet: My insurance company wanted to raise my premiums by X% next year! I spoke up and you can too! http://on.ny.gov/1ALYFCs #RateReview @HCFANY
What Your Comments Should Say:
Your comments don’t need to be long or complicated. DFS wants to know how a premium increase would affect your life. A short explanation is fine. You may want to include:
- The name of your insurance company and plan
- How a premium increase would affect you and those covered by your plan
- What changes you would have to make to afford the insurance
- Whether you are likely to keep health insurance if the increase goes through
Your Comments Really Matter!