Crystal Run’s rate hike requests highest in NY

May 21--Crystal Run Health Plans, the insurance company run by the Town of Wallkill-based physicians' group, is seeking an 89.1 percent increase in its 2017 premiums because it underestimated the cost of providing health care when it entered the market this year.

The company also cites the demographic assumptions about its members and their age, higher administrative costs and elimination of a federal reinsurance program as reasons for requesting the increase from the state Department of Financial Services. The state agency often reduces proposed increases before approving them.

The raise sought by Crystal Run is the highest of any insurance company in New York State, most of which have applied for premium increases in the individual marketplace. They range from 6.1 percent sought by HealthNow New York and 19.4 percent by Aetna, to 89.1 percent by Crystal Run. The weighted average requested increase is 17.3 percent.

Crystal Run's request in the small group marketplace is also the highest of all insurers, at 66.6 percent. The lowest requested increase is by Healthfirst Health Plan (Managed Health) at 5 percent. The weighted average for all companies is 12 percent.

Crystal Run declined to discuss its rate-increase requests other than to say they were being reviewed by the state.

"Crystal Run is committed to achieving the triple aim: improving patient care, improving health and reducing cost," Steve Zeng, executive director of CRHP, said in an emailed statement. "With its proposed 2017 rates, Crystal Run Health Plans will be among the lowest cost options for individuals and small groups in our region."

Crystal Run entered the health insurance market in 2016 touting its low cost and unique services such as a health concierge to guide members through the system. Its entry created ripples because it is one of a handful of health-insurance companies that are run by health-care providers.

Its monthly premiums were among the lowest in the state, slightly above those of Health Republic, which went out of business at the end of 2015 because of poor financial health.

Todd Janotti, president of Janotti insurance in New Windsor, which sells Crystal Run Health Plans, said he isn't surprised by the increase.

"They can't expect to be the cheapest guy on the block and then not expect this to happen," said Janotti. "The same thing happened to Health Republic."

The New York Health Plan Association, an industry group, called the proposed increases necessary to maintain the financial stability of the state's market and said the rates were justified based on the circumstances of each plan.

"The 2017 rate submissions reflect increases that are the direct result of the underlying cost of care and marketplace changes that continue to impact health plans' operations," Paul F. Macielak, HPA president and CEO, said in a statement. "Everyone focuses on the rates plans are requesting, while the factors that drive premiums continue to go unchecked."

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