“Outrageous.” “A disgrace.” “An undue burden.”
Those were just some of the comments the state has received this month in response to requests from health insurers to increase premium rates on public exchange plans.
The comment period for proposed rate increases from insurers on the New York State of Health exchange is set to close in July. Those choice words are among a series of comments that mostly implore the state Department of Financial Services to decrease the proposed rate hikes.
For the 16 companies that offer plans in the state’s market for individuals, the average increase request is 16.6 percent. For the 20 companies in the small business marketplace, the average requested increase is 11.5 percent.
While the majority of New Yorkers receive health care through their employer and would not be affected directly by the rate hikes, the increases would impact the approximately 243,000 residents enrolled in qualified health plans through the state exchanges set up under the Affordable Care Act. In Westchester County, there are 14,682 people who have purchased qualified health plans on the individual exchange as of January 2017, according to state data.
How much of that rate increase will be felt by individual policy holders varies, as more than half of the people who utilize the qualified plans on the state’s health care exchanges receive federal aid.
Insurers have said publicly and in filings with the state that the rate increases are necessitated by climbing health care costs. Industry groups have also expressed concern with what they say is the state’s tendency to deny rate increases. The Department of Financial Services can accept proposed rate hikes, decrease them or even set them higher if they feel that’s what necessary for the well-being of the marketplace.
Last year, the department cut insurers’ requested 2017 rate increases by more than 28 percent overall. But the agency also approved rates above what was requested for a few companies.
The state’s main health insurance industry group, the New York Health Plan Association, says the state is more likely to push rates lower, however. According to data it published in May, the Department of Financial Services reduced rate increase requests by 30 percent and 32 percent in the individual and small group markets, respectively, for the 2016 coverage year. For the 2017 coverage year, individual and small group rate increase requests were cut by 16 and 32 percent.
Fidelis Care has the largest share of customers on the individual exchange in Westchester, at about 34 percent. The insurer is requesting an 8.5 percent increase for its individual market plans.
UnitedHealthcare, which covers about 4 percent of Westchester’s individual market, requested the largest increase among downstate insurers at 38.5 percent. CareConnect, representing 15 percent of Westchester’s individual market, requested a 29.7 percent increase.
Emblem is not far behind, with a request for a 24.9 percent increase. Emblem covers about 11 percent of Westchester residents enrolled in the individual market, according to state data.
In the small group market, the state marketplace for businesses with fewer than 100 employees, CareConnect has 75 percent of Westchester’s participants. In that market, the company has proposed a 19.3 percent increase in rates.
In a June press release, CareConnect said its small group rates could have been kept flat if not for a large payment into the federal risk adjustment program. CareConnect owes $112 million in small group risk adjustment payments, which it says is about half its revenue from the small group market.
The payments are part of an Affordable Care Act program designed to prevent insurers from going after only the healthiest customers. It requires carriers with particularly healthy customers to transfer money to carriers with relatively unhealthy populations.
CareConnect, which was launched by Long Island-based Northwell Health as the state’s first provider-owned commercial health plan, argues that flaws in the process of calculating the payments force smaller insurers to subsidize bigger ones.
The state Department of Financial Services is reviewing the measure and is proposing modifications to the risk adjustment program.
Leslie S. Moran, senior vice president for New York Health Plan Association, said the state put in place regulations that will allow it to make modifications to the program to “account for the fact that New York’s risk profile is different than it is in other states.”
“New York has some unique characteristics that impact the data — we allow more tiers within policies than many states and we have overall higher health care costs,” Moran said in an email. “That’s why DFS felt it needed to devise its own risk adjustment mechanisms. Essentially, proposed new regulations would allow the department to adjust the federal calculations to better reflect these differences.”
There will be winners and losers among the state’s insurers during that process, Moran said, so the industry group does not have an official stance on any proposed changes.
“What we have said to the department is that we understand the importance of a well-functioning risk adjustment program,” Moran said. “We support a program that balances out the differences in risk that plans absorb, but we also have some concerns about making sure the state is using its own risk adjustment in a logical way.”
EmblemHealth, MVP Health Plan and Capital District Physicians’ Health Plan also offer small group plans in Westchester. Both MVP and Emblem requested rate increases of 8.5 percent. CDPHP requested a 21 percent increase.
Overall, about 3.6 million people get health insurance through the New York State of Health exchange. That includes 2.4 million enrollees in Medicaid, 665,000 New Yorkers on the state’s Essential Plan and just under 300,000 in the Child Health Plus plan.
A report released in February by the state Department of Health found that 2016 marketplace enrollment increased by 751,000 people, or 26 percent, from a year earlier. In Westchester, nearly 152,000 people enrolled in exchange plans, a 38 percent increase from 2015.