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Regulators cut proposed insurance rate hikes

State insurance regulators once again slashed the rate hikes sought by New York’s health insurers, cutting requested prices for individuals and small businesses by more than 30 percent – and saving customers more than $430 million.

Among local carriers, regulators accepted proposed price cuts by Independent Health Association, while hacking requests by HealthNow New York and the parent of Univera Healthcare. The state ordered HealthNow, the largest carrier locally, to cut its individual rates from current levels. The insurer wanted to increase them by nearly 7 percent.

“We closely analyzed each insurer’s request and cut rates that were excessive or unreasonable,” said Anthony J. Albanese, acting superintendent of financial services.

At the same time, he acknowledged that the underlying medical costs keep rising and need to be addressed. “It is vital that we continue to attack the underlying factors driving up health insurance premiums in order to bring better care to patients at lower costs,” Albanese said.

The trade group for New York’s health insurers criticized the state’s actions, arguing that the rates insurers sought were justified in order to ensure companies’ viability “after suffering two years of financial losses when the state significantly reduced premium requests.”

“The premium rate approvals announced today by the Department of Financial Services continue an artificial suppressing of rates merely to support the claim that New York is keeping premium increases to ‘below the average increase in health care costs,’ which doesn’t make sense,” New York Health Plan Association CEO Paul Macielak said.

Friday’s announcement, made under the state’s prior-approval law, follows rate proposals submitted in May, and affects rates for both “community-rated” policies and those sold on the state’s health insurance exchange, the NY State of Health. Overall, insurers had asked for a 10.4 percent hike in the individual market, but that was reduced to 7.1 percent, while carriers in the small group market asked for a 14.4 percent increase but got just 9.8 percent. Open enrollment for the state exchange will start Nov. 1 for Jan. 1 coverage.

HealthNow, which owns BlueCross BlueShield of Western New York, wanted to raise individual rates by 6.68 percent and small group rates by 8.06 percent, but regulators instead ordered the carrier to lower individual rates by 1.32 percent while slashing the small group hike to just 0.66 percent.

HealthNow spokeswoman Julie R. Snyder said the Buffalo-based carrier “expressed our concerns” to regulators and “gained some understanding” of their rationale, but still questioned the wisdom of rejecting rates that “appropriately reflect the cost of medical care in the markets we service.”

Rochester-based Excellus Health Plan, which owns Amherst-based Univera, sought a 12.8 percent hike for individual clients and 13.9 percent for small groups, but was approved for only 5.72 percent and 10 percent, respectively.

Independent Health, meanwhile, sought and received a 10.36 percent cut in individual rates and cuts of 15.6 percent and 6.19 percent for two affiliates that offer small-group policies. IHA is the No. 2 carrier locally, and plans four new small-group products for next year.

“The sharp drop in our 2016 rates is the result of lower expected claims cost trends, lower administrative expenses and anticipated reimbursement through a risk adjustment provision of the Affordable Care Act,” said Nora McGuire, senior vice president and chief marketing officer.

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