Residents of New York will find that their health plans aren’t quite as affordable as they were for 2014.
Regulators in New York have now given their approval to increase health insurance rates for next year, although the hikes in the premiums are not going to be as high as what the industry had initially wanted.
The rate increases will also apply to the policies that are being sold on the state’s new exchange.
The health insurance rate increases will apply to the policies that are being sold in the state, said the Department of Financial Services, which gave its approval to the higher prices. It pointed out that the plans sold on the exchange would also be affected by these new rates. In the individual market, the state agency gave its approval to an average increase of 5.7 percent. For the small group market, on the other hand, the average increase was just slightly higher, at 6.7 percent.
Overall, the industry had been asking for a health insurance rate increase of 12.5 percent in the individual market.
Insurance companies had also been seeking an increase of 13.9 percent in the small group market. Clearly the regulators gave their approval to a much smaller figure than what had been sought. This was perfectly within their authority to reduce the changes in rates if they want, as they must sign off on any increases that the industry intends to make.
According to the superintendant of financial services in New York, Benjamin Lawsky, “We closely scrutinized the proposed rate increases insurers requested and reduced them significantly where appropriate”
Even though the premiums for these health plans will rise for 2015, they remain an average of about 50 percent lower than what they had been before the exchange was put into place. For many people, federal subsidies apply. These subsidies tend to increase as premiums rise, said Lawsky’s office. This will help to take some of the strain off of the higher premiums calculated by the insurers.
Equally, the New York Health Plan Association – a trade group representing the health insurance companies in the state – has said that the increases in the rates are irresponsible and inadequate. Within their statement they cautioned that rates this low could lead providers to have to shrink their offerings.