INSURANCE RATE HIKES SLASHED
Insurance premium rate hike requests were slashed in New York by the Department of Financial Services (DFS) and that’s a big savings for 2.3 million. Consequently, Governor Andrew M. Cuomo says New Yorkers will save $500 million on health insurance premiums in 2013. New York is one of 37 states where the legislature gave regulators power to approve rate increases and the ability to reduce proposed premium rate hikes.
Health insurers wanted an increase of about 12.4 percent, but DFS cut the average increase to 7.5 percent.
The rate hikes affect mostly small groups, those covered by large group HMOs, individual direct-pay plans and Medicare Supplement policies. Rate hikes are expected to go into effect in January.
Rates for small group plans will increase an average 9.5 percent, down from the 15.7 percent in average premium increases proposed by insurance companies. Increases for HealthyNY premiums were cut by an average of more than 13 percent, and those who buy individual coverage were saved increases of more than 5 percent.
Governor Cuomo said, “We have made progress in holding back rates, but we recognize that much more needs to be done. This Administration is firmly committed to making sure that health insurance is available to all New Yorkers. It must be made affordable by identifying ways that can be used to restrain the rising cost of health care services.”
The rate hike cut was applauded by consumer advocates. The following statements were included in a press release from Governor Cuomo’s office:
Elisabeth R. Benjamin, Vice President of Health Initiatives at the Community Service Society of New York and a co-founder of Health Care for All New York, which filed public objections to the insurers’ rate requests, said: “This is a crucial victory for New York’s small businesses and families who face a daily struggle with rising health care costs. These rate roll-backs demonstrate the profound impact health care reform is having on New Yorkers and our small businesses.”
Blair Horner, Vice President for Advocacy, American Cancer Society Cancer Action Network (ACS CAN) of NY & NJ, said: “Better scrutiny of insurance rates has resulted in real savings that will benefit consumers. ACS CAN supports the administration’s efforts to curb rate hikes and bring more accountability to insurers.”
David McNally, AARP New York Manager of Government Affairs and Advocacy, said: “AARP commends Governor Cuomo for his leadership in helping consumers who, at the end of the day, are getting hit with the rising health insurance costs. AARP has long supported health insurance market reforms and greatly appreciates the Governor’s actions in ensuring New Yorkers get a fair value when paying for their health insurance.”
Ben Geyerhahn, New York Director for Small Business Majority, said: “We’re pleased to see Governor Cuomo taking action to help small businesses by utilizing the New York’s prior approval law. The average premium rate increase of 15.8 percent proposed by insurers in New York would have impacted 1.2 million employees and their families at small businesses. It’s a relief to see the governor knock those rates down to an increase of practically half the size, at 9.6 percent. It means small businesses are looking at significant savings they can invest in growing their companies, thanks to the provision of healthcare reform that calls on insurance companies to justify proposed rate increases or lower them.”
Todd Shimkus, Saratoga County Chamber of Commerce President, said: “The Administration’s implementation of prior approval has been of great value and benefit to small businesses across New York State and their employees. It was not fair that insurers could for many years file and use whatever rates they wanted as was the case before. We knew if insurers had to justify their rates prior to their being approved as opposed to after the fact that health insurance rate increases would come down and consumers would benefit. Our members now not only benefit from getting better rates up front but also because the new law requires that those rates be in place by November 1st of each year so that employers and employees have plenty of time to compare rates and benefits to find the plan that best meets their needs.”
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