Department of Financial Services Announces 2017 Health Insurance Rates
Rates for individuals more than 55% lower than before establishment of New York’s Health Exchange, adjusted for inflation.
Overall requested rate increases reduced by over 28%, saving consumers more than $302 million.
Tax credits will result in lower actual premiums for many.
Overall requested rate increases reduced by over 28%, saving consumers more than $302 million.
Tax credits will result in lower actual premiums for many.
Financial Services Superintendent Maria T. Vullo today announced the 2017 health insurance rates for New York individual and small group markets, including rates for the NY State of Health, New York’s official health plan marketplace. Using sound actuarial principles and taking into account the need for a competitive New York marketplace that supports consumer choice, the Department of Financial Services (DFS) reduced insurers’ requested 2017 rate increases by more than 28 percent overall, which will save policyholders more than $302 million.
“DFS carefully examined the rates requested by health insurers to reduce excessive health insurance premium increases in the face of rising national healthcare and pharmaceutical costs,” said DFS Superintendent Vullo. “While premiums are increasing nationally, New York’s rates are comparable or lower than rates requested and approved in other states. More than 50 percent of consumers buying plans through the NY State of Health will receive a tax credit offsetting the increases in premiums, and for some the credit will result in lower actual premiums. DFS will continue to protect consumers and ensure access to healthcare, while maintaining a vibrant and competitive New York insurance market.”
“Consumers should shop around for the best value,” said Donna Frescatore, Executive Director of NY State of Health. “The Marketplace offers one-stop shopping for individuals and small businesses, and it’s the only place you can receive federal financial assistance which greatly helps make coverage more affordable for many New Yorkers.”
Reflecting a nationwide trend, the main drivers of premium rate increases are underlying medical costs. For the 2017 rates announced today, DFS estimated that insurers’ average claims trend is approximately 7 percent for the individual market and 8.5 percent for the small group market. Inpatient hospital and drug costs account for the largest share of medical expenses (more than 40 percent), followed by ambulatory surgery (12 percent) and diagnostic testing/lab/x-ray (11 percent). The largest growth in spending occurred in drugs, with very large increases attributable to Hepatitis C drugs (54 percent unit cost increase and 14 percent more use of the drug).
Under New York Law, insurers must spend a specific minimum percentage of premium dollars on health care costs. The balance goes to paying for insurer administrative costs and profit. For individual and small group policies, that minimum requirement, called the Minimum Loss Ratio, is 82 percent. The 2017 rates approved by DFS estimate that insurers will spend even higher percentages on health care costs – an 85.5 percent overall average for small group plans and an 87.2 percent overall average for individual plans.
Like other states throughout the nation, the 2017 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program which accounts for 5.5 percent of the rate increase.
In addition, the federal risk adjustment program, under which insurers with healthier enrollees are supposed to pay insurers with less healthy enrollees, has caused significant shifts in dollars among plans, requiring some insurers to make substantial payments under the program. DFS has previously raised concerns about the federal risk adjustment program in New York. In order to better achieve the goals of this risk adjustment program, DFS is examining possible future actions to address disparities caused by the program in New York.
Rates are also rising nationally due to more comprehensive claims data. Until this year, insurers have had little claims data on the hundreds of thousands of newly insured members who entered the market in 2014. Insurers now have more claims data to adjust premiums, which demonstrate that some increases are justified.
Small Group Market
More than one million New Yorkers are enrolled in small group plans. Insurers requested an average rate increase of 12.3 percent in the small group market. DFS cut the requested rate increases by 32 percent to 8.3 percent in 2017, saving small businesses $251 million. A number of small businesses will also be eligible for tax credits that may lower those premium costs even further.
Individual Market
Over 350,000 New Yorkers are enrolled in an individual plan. DFS reduced insurers’ total weighted average increase requested for individuals from 19.3 percent to 16.6 percent. Rates for individuals are more than 55 percent lower than prior to the establishment of the NY State of Health in 2014, adjusting for inflation but not counting federal financial assistance that is available to many consumers purchasing insurance. Financial assistance through federal tax credits for those who qualify will also increase in 2017. Households between 200 percent of the federal poverty level, which is the highest level to qualify for the Essential Plan, and 400 percent of the federal poverty level ($47,520 for individuals and $97,200 for a family of four) qualify for federal tax credits, which will reduce premium costs. In 2016, more than 50 percent of individuals who enrolled in a Qualified Health Plan on the Marketplace received financial assistance, which significantly mitigated the impact of premium increases for these individuals. For example, the 2017 overall average increase for individuals who purchase silver level plans, the most popular choice for individuals purchasing on the Marketplace, is reduced to about 9 percent.
These rate increases will not impact the new Essential Plan, available only through the NY State of Health, which will still have premiums of $20 or less for lower income New Yorkers who qualify. More than 600,000 New Yorkers are projected to be enrolled in the Essential Plan in 2017. Information about the Essential Plan, including income levels and the services it covers, is available here.
INDIVIDUAL*
Company | Insurer’s Original Requested Change | Insurer’s Revised Requested Change*** | Approved 2017 Rate Action | DFS Modification |
Aetna Life | 19.4% | 19.4% | 8.0% | -11.4% |
Affinity** | 20.7% | 24.8% | 22.4% | -2.4% |
Capital District Physicians’ Health Plan** | 11.2% | 13.1% | 13.9% | 0.8% |
Crystal Run Health Plan, LLC | 89.1% | 86.0% | 80.5% | -5.4% |
Empire Healthchoice HMO** | 25.1% | 25.1% | 15.2% | -9.9% |
Excellus** | 15.9% | 15.9% | 15.4% | -0.5% |
Health Ins Plan of Greater New York (HIP)** | 14.0% | 14.0% | 13.9% | -0.1% |
Healthfirst PHSP, Inc.** | 6.6% | 6.5% | 7.4% | 0.9% |
Healthnow New York** | 6.1% | 12.9% | 8.7% | -4.2% |
Independent Health Benefits Corporation** | 19.2% | 19.2% | 19.6% | 0.4% |
MetroPlus** | 20.3% | 20.3% | 29.2% | 8.9% |
MVP Health Plan** | 6.1% | 6.1% | 6.0% | -0.1% |
North Shore-LIJ Ins Co Inc (Care Connect)** | 29.2% | 29.2% | 29.2% | -0.1% |
NY State Catholic Health Plan Ins (Fidelis)** | 8.1% | 13.0% | 11.6% | -1.4% |
Oscar** | 18.4% | 20.9% | 19.6% | -1.3% |
UnitedHealthcare Ins Company of New York | 26.8% | 26.8% | 11.5% | -15.3% |
UnitedHealthcare of New York Inc** | 45.6% | 45.6% | 28.0% | -17.6% |
All Companies | 18.0% | 19.3% | 16.6% | -2.7% |
SMALL GROUP*
Company | Insurer’s Original Requested Change | Insurer’s Revised Requested Change*** | Approved 2017 Rate Action | DFS Modification |
Aetna Life | 12.0% | 12.0% | 8.4% | -3.6% |
Capital District Physicians’ Health Plan | 9.6% | 12.0% | 18.5% | 6.5% |
CDPHP Universal Benefits Inc.** | 11.6% | 11.6% | 9.5% | -2.1% |
Crystal Run Health Insurance Company | 61.9% | 57.2% | 53.5% | -3.7% |
Crystal Run Health Plan, LLC | 66.6% | 62.7% | 58.5% | -4.2% |
Empire Healthchoice Assurance | 10.0% | 10.0% | 9.3% | -0.7% |
Empire Healthchoice HMO | 12.6% | 12.2% | 11.4% | -0.8% |
Excellus** | 12.3% | 12.3% | 10.7% | -1.6% |
Health Insurance Plan of Greater New York (HIP)** | 10.6% | 5.3% | 5.7% | 0.4% |
Healthfirst | 5.0% | 5.0% | 6.8% | 1.8% |
Healthnow New York** | 5.8% | 10.6% | 10.4% | -0.2% |
Independent Health Benefits Corporation** | 11.2% | 8.5% | 11.5% | 3.0% |
MetroPlus** | 13.1% | 13.1% | 18.8% | 5.7% |
MVP Health Plan** | 5.4% | 5.4% | 5.0% | -0.4% |
MVP Health Service Corp | 6.8% | 7.0% | 6.7% | -0.4% |
North Shore-LIJ Ins Co Inc (Care Connect)** | 16.8% | 16.8% | 23.2% | 6.3% |
Oxford Health Insurance Inc | 12.9% | 12.9% | 5.6% | -7.3% |
UnitedHealthcare Ins Company of New York | 12.8% | 12.8% | 5.3% | -7.5% |
All Companies | 12.0% | 12.3% | 8.3% | -4.0% |
* All amounts are rounded to the nearest 1/10.
**Indicates that the company makes products available on the “New York State of Health” marketplace.
***After rate applications were filed on 5/9/2016, additional information, including the final results of the federal risk adjustment program, prompted several insurers to update their initially filed rates.
The next NY State of Health open enrollment period begins on November 1, 2016 for coverage starting on January 1, 2017. New Yorkers eligible for Medicaid, the Essential Plan, those qualifying for a special enrollment period, including victims of domestic violence, and all children can enroll in coverage through NY State of Health at any time during the year.
The Small Business Marketplace for employers with 100 or fewer employees is open to enrollment throughout the year. For more information about the NY State of Health exchange, please visit https://nystateofhealth.ny.gov/.