The six most popular insurance plans on the New York state health insurance exchange are seeking double-digit increases in their premium rates for next year, with an average request of a 14.6-percent rate hike.
Health Republic, the most popular plan among those offered on the state exchange, New York State of Health, has requested an average overall rate increase of 15.2 percent in its individual health exchange plans, according to 2015 rate filings from insurance companies released by the state’s Department of Financial Services last week.
The premium increase requests mirror earlier rate filings in 10 states proposing increases between 8.5 percent and 22.8 percent, with the average being about 10 percent.
Craig Hasday, chief operating officer of New York-based Frenkel Benefits, doubts such steep rate increases will be approved by the state, but says the possible implication unveils the important role benefit advisers play in the insurance market.
“The value of the benefit adviser is becoming more and more apparent as the system evolves,” he says. “With rate changes, plan design changes, product withdrawals and carrier withdrawals, benefit advisers need to be particularly attuned to the marketplace.”
And the adviser’s knowledge is invaluable, he says as the constantly changing marketplace means consumers will need, every year, to evaluate their options.
“They can’t just check a box, same as usual,” he says. “The products are very hard to discern.”
The proposed rate increases represent only what the insurers would like to see, and state officials can still mandate insurers accept lower premiums than those requested.
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Last year, insurance companies operating in New York’s state exchange requested 9.5-percent increases in premiums for their individual plans, but the state Department of Financial Services approved, on average, only a 4.5-percent increase.
Hasday says New York state will have to decide how to balance keeping premium costs down for consumers and maintaining enough rate adequacy that insurers don’t feel the easiest choice is to withdraw from the state exchange altogether.
Risk pools
The insurers claim this year’s double-digit premium increase requests are due to several reasons, which include rising medical costs and having a sicker pool of customers than originally expected.
“Medical costs and administrative expenses are the main components from which we derive our annual premium,” Health Republic says in its filing. “Our premiums must also be adequate to ensure our organization achieves long-term sustainability as New York’s only not-for-profit CO-OP.”
Fidelis, the New York State Catholic Health Plan, which currently covers 17 percent of the market is requesting an average 7.1-percent increase in its premiums for next year.
According to the insurer, “The population that entered the individual market with Fidelis and with other carriers is older than anticipated. The older population alone would require a 17-percent increase.”
MetroPlus, the third-most popular plan on the exchange, is requesting an average 18.5-percent increase in its premiums next year.
The proposed rate changes from all of the insurers are currently being reviewed by New York’s Department of Financial Services and new rates will be released later this summer. The rates will be effective on Jan. 1, 2015.
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