By Rick Karlin
Health insurance rates will be allowed to rise an average of about 6 per cent next year, according to figures released Thursday by the state Department of Financial Services, which regulates the industry.
But those increases will only apply to individual health plans, those that are part of the state's new Health Exchange, and for small groups, often businesses with fewer than 50 people.
Larger plans don't face the same state regulatory process. Statewide, fewer than 2 million New Yorkers are subject to the rates released Thursday, according to industry estimates.
"We closely scrutinized the proposed rate increases insurers requested and reduced them significantly where appropriate," DFS Superintendent Ben Lawsky said in releasing the rate approvals.
"While we have made substantial progress in reforming our health care market and holding down costs, there is much more work ahead," he said.
Insurance companies had on average sought increases of about 12.5 percent for individual plans, and 13.9 percent for small group rates. The average approved increases were 5.7 percent and 6.7 percent, respectively.
The approvals include individual coverage for the more than 1 million New Yorkers who now purchase insurance through the state's Health Exchange, which began last year as part of the federal Affordable Care Act reforms.
A great many of those had previously been covered under Medicaid or had no insurance, so a year-to-year comparison can't really be made.
Lawsky said much of this coming year's increases stem from a lowering of federal subsidies that were in place when the health exchanges began. The subsidies came in the form of federally backed reinsurance to protect against unexpected losses.
Health insurers also cited ever-rising drug and medical costs as driving increases.
Consumer groups said they were pleased with the relatively modest increases, but the insurance industry said some firms might be hard-pressed to deal with the limits.
"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.
Holding down the increases should save ratepayers an estimated $1 billion.
But Paul Macielak, president and CEO of the NY Health Plan Association, an industry trade group, said the constraints might prompt some insurers to drop coverage or offer fewer choices to consumers.
"We believe this rate-setting process is seriously flawed, that the approved rates are inadequate, and that DFS's decisions are irresponsible and do not reflect actuarial reality," Macielak said.
He cited medical costs, as measured by an inflation index, as rising 8 percent, outstripping the allowed rate increases.
Macielak also said taxes to pay for the Affordable Care Act have gone up this year.
Still, some providers said rates could go down for certain plans or policies.
"In many instances, our filed health plans will be less than they are in 2014, in other instances, the final adjustments will reflect moderate and reasonable increases," said Jared Gross, vice president of health care economics for Blue Shield of Northeastern New York.
Rates vary tremendously, based on location and the type of plan.
In the Albany area, for example, a basic plan that covers "catastrophic'' costs can run under $150 per month while a more complete "platinum" option can be more than $700.
Source: Times Union
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