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Health insurance rates going up for individuals, small groups

New York State has announced health insurance rates for individuals and small groups in 2018. The result is a premium hike, but not as high as insurers had requested. However, the state said rates will actually decrease after adjusting for inflation and federal tax credits.

Insurers had requested an average increase in rates for the some 350,000 New Yorkers enrolled in an individual commercial plan of nearly 17.7 percent. The state reduced that to 13.9 percent, citing the Affordable Care Act for already reducing premiums for individuals are more than 55 percent since 2014.

Insurers also had requested an average rate hike of 11.7 percent for the more than 1 million New Yorkers enrolled in small group plans. The state reduced that to 9.3 percent for 2018, citing tax credits that may lower those premium costs even further.

The state said these rate increases will not impact the more than 650,000 New Yorkers enrolled in the Essential Plan - available through the NY State of Health - "which will still have premiums of $20 or less for lower income New Yorkers who qualify." 

“DFS has carefully examined the rates requested by health insurers to reduce the burden of excessive health insurance premium increases on New Yorkers while maintaining competitive markets in the face of rising national healthcare and pharmaceutical costs, compounded by ill-conceived Congressional attempts to repeal or replace the Affordable Care Act,” said Financial Services Superintendent Maria Vullo. “New York’s healthcare market continues to be robust, with 15 plans offering individual coverage and 20 plans offering small group coverage and consumers in every county having a choice of coverage. With tax credits for eligible New Yorkers, cost of coverage will actually decrease by as much as 5 percent for those purchasing the lowest cost silver plans on the NY State of Health Marketplace.”

Vullo also said she has submitted a declaration in a pending lawsuit seeking to compel the federal government to continue paying Cost Sharing Reduction subsidies, despite a threat by the White House to end them. In light of the ongoing uncertainty regarding federal CSR payments, Vullo said the state granted "an additional rate factor" based on information insurers provided in May 2017 that "estimated potential funding loss." That additional factor was applied to the individual rates of silver plans.

The state said "underlying medical costs continue to be the main drivers of premium rate increases," citing drug costs at 26 percent of all medical costs - including a 49 percent rise in specialty drug costs - inpatient hospital costs at 19 percent, physician specialty services at 12 percent and diagnostic testing/lab/x-ray at 10 percent.

“Many consumers buying plans through the NY State of Health Marketplace will be eligible to receive federal tax credits, reducing the monthly cost of coverage,” said NY State of Health Executive Director Donna Frescatore. “In many cases, after tax credits, consumers’ costs will be about the same or in some cases lower in 2018.”

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