N.Y. limits average health insurance increases to 5.7%

ALBANY – The state on Thursday approved an average 5.7 percent rate increase for health insurers in 2015, spurning their request for a 13 percent hike.
Insurers in July cited growing costs in their rate requests. But the state Department of Financial Services set the rate and said it would be an average of 5.7 percent for individual plans, saying it will save customers about $1 billion next year.
Overall, the agency contended that rates will remain 50 percent lower than they were prior to state's health care exchange that started Jan. 1. Nearly 1 million New Yorkers enrolled in the health exchange. The next enrollment period starts

Nov. 15 for coverage starting on Jan. 1.
For small-group insurance, insurers wanted a 13.9 percent increase. The state reduced it to 6.7 percent.

"We closely scrutinized the proposed rate increases insurers requested and reduced them significantly where appropriate," said Benjamin Lawsky, the state agency's superintendent, in a statement.
The rate proposals from roughly 40 insurers came for the second year of the health exchange, and insurers said it's costing them more for coverage for individuals and businesses.

Excellus Health Plan, based in Rochester, proposed a 19.7 percent increase; Empire BlueCross, based in Albany, sought an 18 percent increase; and MVP Health Care, based in Schenectady, wanted a 19 percent increase.
But Excellus will get a 9.2 percent increase; Empire can raise rates 7.4 percent; and MVP was approved for a 10 percent increase.

Six insurers cut rates in 2015: including Healthfirst PHSP Inc. and Affinity Health Plan, both based in New York City, and UnitedHealthcare of NY.
Paul Macielak, president of the state Health Plan Association, which represents insurers, ripped the state's decision, saying it was "irresponsible" and doesn't "reflect actuarial reality."

He warned that the lower-than-sought rates could lead to fewer customer choices. It could also lead insurers to withdraw from regions of New York or drop out of the health exchange, which most of them entered last year, he said.
"New York's market is very competitive, and plans submitted rates that were as low as possible while still being actuarially sound," Macielak said in a statement.
Most of the average increase in individual rates is the result of a reduction in federal assistance for insurers through the federal Affordable Care Act, Lawsky said.

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