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New York, January 22, 1998

The Insurance Department today announced that Independent Health Association’s requested average 28.9% rate increase for all contracts and riders in its New York-Metro Division has been reduced to 19.1%. The Department has granted the HMO’s requested average rate increases of 35.5% for its prescription drug riders in its Western, New York Division and 6.6% average increase for all contracts and riders in its Hudson Valley Division. These rate changes were effective January 1, 1998.

The Insurance Department’s decision comes after a careful examination of the HMO’s current financial condition and its projections of revenue and expenses for next year. Testimony at public hearings in Tarrytown and Williamsville were also considered.

Independent Health cited increased utilization and costs associated with its prescription drug rider in the Buffalo area. The HMO also cited increased utilization of inpatient admissions, ambulatory procedures, laboratory tests, radiology services and prescription drug costs in its Hudson Valley Division. The Department found these assumptions reasonable. However, the Department disagreed with the HMO’s projections for its Metro-New York Division and adjusted the rates to more actually reflect the HMO’s loss experience in this region.

The rate increases affect 410,000 members in Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, and Wyoming counties; 13,960 members in Dutchess, Orange, Putnam, Rockland, Ulster and Westchester counties; and 4,250 members in Bronx, Kings, Nassau, New York, Queens, Richmond, and Suffolk counties.

A table listing individual contract rate changes is available upon request.

Department of Financial Services


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