New York State Gives Health Insurers Average Rate Rise of 5.7%

By ANEMONA HARTOCOLLIS

Health insurance companies in New York State will receive average rate increases of 5.7 percent next year, less than half the increases they had requested for individual and family plans, Benjamin M. Lawsky, the state’s financial services superintendent, said on Thursday.

The insurance companies had proposed increases averaging 12.5 percent, with some companies seeking as much as 28 percent more for some plans.

The average increase that the state decided to award is below the state’s 8 percent overall increase in health care costs.

Mr. Lawsky said the state had tried to balance its interest in making insurance affordable and not putting too much stress on insurance companies. "We don’t want to see a spike in the rate, but we also don’t want to see companies withdrawing, and that’s the yin and yang," he said.

But the insurance industry said on Thursday that on the contrary, the new rates were "irresponsible" and "do not reflect actuarial reality."

Paul Macielak, president of the New York Health Plan Association, an industry trade group, said the rates would be destabilizing for companies and consumers, and could lead some companies to reduce the types of plans they offered or to withdraw from some regions or from the market entirely.

The increase also applies to New York State of Health, an exchange set up under the Affordable Care Act last year to provide subsidized health insurance for state residents who might not otherwise be able to afford it. Mr. Lawsky said he wanted to maintain the momentum that had given New York one of the more successful state exchanges. It has enrolled nearly one million New Yorkers in individual coverage, including about 370,000 in private plans.

Mark Scherzer, a health care lawyer who represents policyholders, said using California’s 4.2 percent increase in the rates of that state’s exchange as a barometer, the result for New York seemed reasonable.

Mr. Scherzer said he was disappointed that in most of New York, none of the insurance companies’ plans allowed patients to use physicians who were not in their network.

He said that to some degree, the rates reflected a political bargaining process. Year after year, insurers ask for much higher increases than they receive, and he said they could anticipate that result this year.

The state approved new rates for 16 companies selling individual plans on the New York exchange. The highest increase, 13 percent, went to Health Republic, which had asked for 15 percent. Mr. Scherzer said that Health Republic, a new company, had underpriced in the first year of the exchange, and then struggled to handle the many customers and claims that it attracted.

Another new entrant into the private market, MetroPlus, had asked for an overall increase of about 18 percent, and the state cut it to about 7 percent.

Source: The New York Times