State approves rate hikes for NY insurers

Premiums for individual insurance plans sold on the New York state public health exchange will increase by an average of 14.6 percent, according to the state Department of Financial Services.

That rate is reduced from the 16.6 percent average increase request insurance companies filed earlier this year with the state. The increase applies only to the 350,000 New Yorkers who bought commercial - qualified health plans on the state market. It does not increase rates on the state's Essential Plan, which offers premiums of $20 or less for qualified New Yorkers.

The state, striking a similar tone to the insurers that filed for increases, blamed the rising premiums on increasing medical costs, particularly the cost of prescription drugs.

The state also considered what it described as an ongoing threat to cost share reduction (CSR) payments that are part of the Affordable Care Act The state announced on Aug. 15 that Financial Services Superintendent Maria T. Vullo had submitted a declaration in a pending lawsuit seeking to compel the federal government to pay the CSR subsidies, which provide federal funds to insurers to offset plans with low out-of-pocket costs.

The Department of Financial Services granted additional rate increases on some company's silver plans in the individual market to account for the potential loss of CSR funding.

For the 15 companies on the state's individual exchange, the overall requested rate increases for individual coverage was reduced by about 3.8 percent - before cost sharing reduction payment adjustments - which the state said will save consumers more than $59 million.

For the 20 companies in the small business marketplace, the state's marketplace for businesses with fewer than 100 employees, the state approved average rate increases of 9.3 percent. The average requested increase was 115 percent.

"DFS has carefully examined the rates requested by health insurers to reduce the burden of excessive health insurance premium increases on New Yorkers while maintaining competitive markets in the face of rising national health care and pharmaceutical costs, compounded by ill-conceived Congressional attempts to repeal or replace the Affordable Care Act," Vullo said. "New York's health care market continues to be robust, with 15 plans offering individual coverage and 20 plans offering small group coverage and consumers in every county having a choice of coverage."