State marketplace health insurers blame individual mandate repeal for 24 percent rate hike

Health insurers offering plans on New York’s Affordable Care Act exchange are asking the state to approve double-digit percentage premium rate hikes for the 2019 enrollment period – a spike they blame, in part, on President Donald Trump and Congress.

The state Department of Financial Services announced June 1 that the 14 insurers operating in the state”™s individual health insurance marketplace requested, on average, a 24 percent rate hike. That”™s up significantly from last year”™s average requests in the market of 17 percent.

The reason insurers are citing for the increase involves two words that should be familiar to anyone who followed last year”™s debate around repealing the Affordable Care Act: individual mandate.

The provision of the Affordable Care Act placed a tax penalty on individuals without health insurance coverage. While it was never the most popular provision of President Barack Obama”™s landmark health care legislation, the bill”™s advocates argued it was necessary for market stability.

Trump opposed it, however, and a Republican-led Congress added a provision in its major tax reform bill that removed the individual mandate”™s tax penalty.

In a statement announcing the rate increase requests, State Financial Services Superintendent Maria T. Vullo said insurers attributed about half of their rate increase requests to risks associated with the repeal of the individual mandate.

“The single biggest justification offered by insurers for the requested increases is the Trump administration”™s repeal of the individual mandate penalty,” Vullo said. “The individual mandate, a key component of the Affordable Care Act, helped mitigate against dramatic price increases by ensuring healthier insurance pools.”

A press release from the New York Health Plan Association (NYHPA), a health insurance industry group, said the rate increases were driven by not just the changes in federal policy, but also rising health care costs, driven by prescription drug prices and charges from hospitals and doctors.

NYHPA President Eric Linzer called the requests reasonable and reflective of the cost of care.

While more than 4.3 million New Yorkers received health insurance through the state exchange, the majority of those sign-ups are for Medicaid, Child Health Plus and the subsidized Essential Plans. The proposed premium increases would only impact the approximately 253,000 residents enrolled in commercial health plans through the exchange. In Westchester County, there are about 15,000 people who bought qualified health plans on the individual exchange for 2018, according to enrollment numbers published in May.

Westchester residents are covered by one of six companies in the county”™s state marketplace: EmblemHealth, Empire Blue Cross Blue Shield, Fidelis Care, MVP Health Plan, Oscar and UnitedHealthcare.

Fidelis has the largest share of Westchester customers at just under half. The company requested a rate increase of 38.6 percent, highest among all insurers. Fidelis covers about 40 percent of all qualified health plans in the state.

EmblemHealth, which has 20 percent of Westchester”™s market, requested an increase of 31.5 percent. MVP Health Plan, which carries 15 percent of all Westchester qualified plans, requested an increase of 6.5 percent.

Oscar, Empire Blue Cross Blue Shield and UnitedHealthcare each represent less than 10 percent of Westchester’s qualified health plan market. The companies requested rate hikes of 25.2 percent, 24 percent and 23.6 percent, respectively.

The state Department of Financial Services will review the requests and is likely to trim the actual increase. Last year, insurers requested average increases of 16.6 percent but only received state approval for an average of 14.6 percent.

In the small group market for small businesses, the requested rate increases were more modest. The 19 insurers offering plans on the market requested an average premium increase of 7.5 percent.

Here”™s the full list of companies and their requests:

Individual market:

CDPHP: 5.1 percent

Crystal Run Health Plan LLC: 15.7 percent

Emblem: 31.5 percent

Empire Healthchoice Assurance: 24 percent

Excellus: 8.9 percent

Fidelis: 38.6 percent

Healthfirst Insurance Company Inc.: 15 percent

Healthfirst PHSP Inc: 15 percent

Healthnow New York: -3.2 percent

IHBC: 21.3 percent

MetroPlus: 1.5 percent

MVP Health Plan: 6.5 percent

Oscar: 25.2 percent

UnitedHealthcare: 23.6 percent

Small group market:

Aetna Life: 16.2 percent

CDPHP: 6.7 percent

CDPHP UBI: 6.1 percent

Crystal Run Health Insurance Company: 11.5 percent

Crystal Run Health Plan LLC: 12.5 perent

Emblem: 12 percent

Empire Healthchoice Assurance:  6 percent

EmpireHealthchoice HMO: 5.2 percent

Excellus: 3.8 percent

Healthfirst Health Plan, Inc.: 21 percent

Healthfirst Insurance Company, Inc: 7 percent

Healthnow New York: -0.1 percent

IHBC: 3.8 percent