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New York State’s insurance rate approvals reflect rising health care costs

Consumers who buy coverage on or off New York State’s health insurance exchange will pay more next year, with rates for individual plans rising from 8.7 percent to 19.6 percent in the Buffalo area, following a review by state insurance regulators.

It could have been worse, according to the Department of Financial Services, which reported that it cut rate hikes sought by New York’s health insurers overall by 28 percent, saving customers statewide more than $302 million.

Among local carriers, regulators approved changes for individuals and small group rates.

• HealthNow New York: The parent company of BlueCross BlueShield of Western New York initially sought a 6.1 percent increase in individual rates and then revised the request to 12.9 percent. Regulators approved an 8.7 percent increase. The company initially asked for a 5.8 percent increase for small groups, revised it to 10.6 percent, and was approved for 10.4 percent.

• Independent Health: Requested a 19.2 percent increase in individual plans, and the state raised it to 19.6 percent. For small groups, the insurer first requested an 11.2 percent increase and revised it down to 8.5 percent. The state approved 11.5 percent, higher than the initial requested rate hike.

• Excellus, parent company of Univera Healthcare: For individual plans, it sought a 15.9 percent increase and was approved for 15.4 percent, and for small groups, it sought a 12.3 percent increase that was lowered to 10.7 percent.

• Fidelis Care: Initially asked for an 8.1 percent increase in individual rates, revised it to 13 percent, and the state approved 11.6 percent.

The changes do not apply to individuals who receive their health insurance through an employer, Medicare or Medicaid.

Overall, insurers had asked for a 19.3 percent hike in the individual market, but that was reduced to 16.6 percent, while carriers in the small group market asked for a 12.3 percent increase but got 8.3 percent. Open enrollment for the state exchange will start Nov. 1 for Jan. 1 coverage.

“DFS carefully examined the rates requested by health insurers to reduce excessive health insurance premium increases in the face of rising national healthcare and pharmaceutical costs,” Maria T. Vullo, financial services superintendent, said in a statement.

The trade group for New York’s health insurers earlier this month warned state officials that the requested rate increases reflected such factors as spiraling drug costs, as well as government mandates and taxes on insurers. In a statement, Paul Macielak, president and chief executive officer of the New York Health Plan Association, expressed satisfaction with the state’s rate decisions.

The premium rate approvals “acknowledge the rising health care costs confronting plans and prior years’ plan losses that were compounded by two years of overall rate reductions,” he said.

At HealthNow New York, the request for individual rates reflected its costs, and the cut by the state will leave premiums inadequate to cover those costs, said Steve Swift, executive vice president and chief financial officer.

The fundamental issue facing all insurers is the rise in medical costs, especially for notably expensive or novel specialty drugs for such conditions as multiple sclerosis, cancer, hepatitis C and rheumatoid arthritis, he said.

Independent Health attributed the adjustment to its rates partially to new state mandates for coverage of substance abuse disorders, and prevention and treatment of breast cancer.

“Our small group and individual rate adjustments are in line with what we’re seeing across the state and nation, as most health plans are faced with the similar challenge of having to offset rapidly rising pharmacy costs and an overall increase in the utilization of medical services and procedures,” said Nora McGuire, senior vice president and chief marketing officer.


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