New York State
NORTH AMERICARES RATE INCREASE APPROVED
New York, January 5, 1998
The Insurance Department today announced that it has approved a requested 16.4% average rate increase for North American Healthcares group prescription drug riders. The decision, effective January 1, 1998, affects 17,000 of the HMOs members in Allegany, Cattaraugus, Chautauqua, Chemung, Erie, Genesee, Niagara, Orleans, Steuben and Wyoming counties.
This decision by the Department comes after a careful examination of the HMOs current financial condition and its projections of revenue and expenses for next year. Testimony submitted at a public hearing November 24 in Fredonia was also considered.
North American Healthcare, known as North Americare, states that it has been experiencing medical loss ratios of between 130 and 140 percent on its pharmacy riders. This means that for every dollar in premium collected, the company is paying out between $1.30 and $1.40 in expenses on its prescription drug riders. The HMO also projects a 5% increase in pharmacy costs for 1998. The Department found these projections reasonable.
A table listing individual contract rate changes is available upon request.