New York Obamacare insurers ask for big rate hikes

May 20, 2016

New York Obamacare insurers ask for big rate hikes

Health insurers are requesting double-digit bumps to premiums across the state, with UnitedHealth seeking a 45.6% hike

New York insurers selling policies on the state’s Obamacare exchange are asking regulators to approve large premium increases as a way to counteract rising costs, and in some cases, gargantuan losses.

Insurers selling plans to individuals on the New York State of Health marketplace requested an average increase of around 17% and those selling small-group plans asked for an average rate hike of about 12%.

New York State of Health has seemed to be more stable than other markets nationally, but insurers here haven’t been immune to national trends that are driving up health care spending and increasing the costs of providing health insurance.

In a statement Wednesday afternoon, the New York Health Plan Association said the hikes are necessary. “The 2017 rate submissions reflect increases that are the direct result of the underlying cost of care and marketplace changes that continue to impact health plans’ operations,” Paul Macielak, HPA’s president and chief executive, said in a statement.

Several notable insurers requested large increases for 2017. UnitedHealthcare, which has pulled out of insurance marketplaces in many other states, asked for a 45.6% increase to premiums. Though UnitedHealthcare is the largest U.S. insurer, it signed up just 2% of individuals who purchased insurance through New York State of Health last year.

Oscar, the venture-capital darling that recently raised $400 million in a financing round from Fidelity, asked for an 18.4% average increase. In a letter to insurance brokers, the Manhattan company said its rate hikes ranged from 8% to 30% around the state. Though the insurer is valued at $2.7 billion, based on the money it has raised, it lost $120 million last year.

Oscar sought to explain the planned rate hikes to insurance brokers in an email sent Wednesday morning.

“There are three main reasons for higher premiums: Medical costs have gone up, government programs that helped cover our costs are ending and our members needed more care than we expected,” the company wrote. “We don’t like raising premiums for our members, but the economics of this market demand as much.”

CareConnect, the insurance arm of Northwell Health, requested a 29.2% increase on average while MetroPlus, the health plan of NYC Health + Hospitals, sought a 20.3% average increase.

Though the rate requests serve as an early indicator of what consumers might expect to pay in 2017, regulators are unlikely to approve them as requested. Last year, the state Department of Financial Services, which must approve all rate change requests, allowed an average 7.1% increase after insurers asked for rates to rise an average of 10.4%.

DFS’ decision on the current rate hikes will be closely watched. The agency was blamed, in part, by the insurance industry for the collapse of Health Republic Insurance of New York, which was shut down by regulators last year. It is also the first rate hike that will be decided under Maria Vullo, who was appointed acting DFS superintendent in January.

In general, consumers have a propensity to seek out lower-cost plans, so during the New York State of Health open-enrollment period, they will have the option to pick a different health plan if their current insurer raised prices too high.

Individual market

Company name 2017 requested rate change
Crystal Run Health Plan, LLC* 89.10%
UnitedHealthcare of New York, Inc.* 45.60%
North Shore-LIJ CareConnect Insurance Company, Inc.* 29.20%
Empire HealthChoice HMO, Inc.* 24.00%
Affinity Health Plan, Inc.* 20.70%
MetroPlus Health Plan, Inc.* 20.30%
Aetna Life Insurance Company 19.40%
Independent Health Benefits Corporation* 19.20%
Oscar Insurance Corporation* 18.40%
Excellus Health Plan, Inc.* 15.90%
Health Insurance Plan of Greater New York* 14.00%
Capital District Physicians’ Health Plan* 11.20%
New York State Catholic Health Plan, Inc. dba Fidelis Care New York* 8.10%
Healthfirst PHSP, Inc.* 6.60%
HealthNow New York Inc.* 6.10%
MVP Health Plan, Inc.* 6.10%
Weighted average on the individual market 17.30%

Source: New York State Department of Financial Services

Small group market

Company name 2017 requested rate change
Crystal Run Health Plan, LLC 66.60%
Crystal Run Health Insurance Company, Inc. 61.90%
North Shore-LIJ CareConnect Insurance Company, Inc.* 16.80%
MetroPlus Health Plan, Inc.* 13.10%
Oxford Health Insurance, Inc.* 12.90%
UnitedHealthcare Insurance Company of New York 12.80%
Empire HealthChoice HMO, Inc. 12.60%
Excellus Health Plan, Inc.* 12.30%
Aetna Life Insurance Company 12.00%
CDPHP, Universal Benefits Inc.* 11.60%
Independent Health Benefits Corporation* 11.20%
Health Insurance Plan of Greater New York* 10.60%
Empire Healthchoice Assur Inc 10.00%
Capital District Physicians’ Health Plan, Inc. 9.60%
MVP Health Services Corp. 6.80%
HealthNow New York Inc.* 5.80%
MVP Health Plan, Inc.* 5.40%
Healthfirst Health Plan (Managed Health) 5.00%
Weighted average on the small group market 12.00%

Source: New York State Department of Financial Services

*Indicates that the company makes products available on the “New York State of Health” marketplace.

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