Cov­er­age rates to grow in state

In­sur­ers blame uptick in pre­mi­ums on drug, hospi­tal costs, fed­eral tax

Albany Times Union - - FRONT PAGE - By Bethany Bump

Health in­surance pre­mi­ums will rise ap­prox­i­mately 6.8 per­cent next year for in­di­vid­u­als and 7.9 per­cent for em­ploy­ers who pur­chase cov­er­age on New York’s state-run health ex­change.

The rate in­creases were ap­proved by the state De­part­ment of Fi­nan­cial Ser­vices, which an­nounced Fri­day it had “saved” con­sumers more than $50 mil­lion and small busi­nesses more than $313 mil­lion by low­er­ing the amount in­sur­ers were ini­tially seek­ing to charge. The rates in­sur­ers had re­quested would have raised pre­mi­ums 9.2 per­cent for in­di­vid­u­als and 12.2 per­cent for em­ploy­ers.

In­sur­ers say the rate hikes are pri­mar­ily driven by ris­ing drug and hospi­tal costs, as well as the re­in­state­ment next year of a fed­eral health in­surance tax.

“The largest com­po­nent of health in­surance pre­mi­ums is the cost of care and the rates health plans had sub­mit­ted were ref lec­tive of those in­creases,” said Eric Linzer, president and CEO of the New York Health Plan As­so­ci­a­tion.

Among com­pa­nies do­ing busi­ness in the Cap­i­tal Re­gion, Health­now New York will be im­pos­ing the largest aver­age rate hike on the in­di­vid­ual mar­ket at 8.6 per­cent. The com­pany, which of­fers plans in the re­gion through its sub­sidiary Blueshield of North­east­ern New York, had ini­tially pro­posed a 10 per­cent hike.

The com­pany will raise pre­mi­ums on the small group mar­ket

— which serves busi­nesses with 100 full-time em­ploy­ees or less — by 5.5 per­cent.

In a state­ment, Blueshield cited ris­ing pre­scrip­tion drug and med­i­cal costs, reg­u­la­tory man­dates, taxes and fees as fac­tors driv­ing its pre­mium hikes. The re­turn next year of the fed­eral Health In­surance Tax ac­counts for roughly 2.5 per­cent of the in­crease, it says.

“Man­ag­ing the cost and qual­ity of health care for our mem­bers re­mains our com­pany’s pri­mary fo­cus,” it said. “We’ll con­tinue to work with reg­u­la­tors, providers and phar­ma­ceu­ti­cal com­pa­nies to ad­dress the in­creas­ing costs of health care, as well as ad­vo­cate for the per­ma­nent re­peal of the (health in­surance tax).”

The tax was im­ple­mented un­der the Af­ford­able Care Act in 2014 to help pay for fed­eral and state-run health in­surance ex­changes. In 2018, Congress ap­proved a one-year mora­to­rium on the tax, which ends this year. At least one ac­tu­ar­ial con­sult­ing firm es­ti­mates the tax will cost in­sur­ers $16 bil­lion in 2020, which they will un­doubt­edly try to re­coup by rais­ing pre­mi­ums.

MVP Health Care, based in Sch­enec­tady, is one of few in­sur­ers whose rate re­quests were granted by the state. It will be rais­ing pre­mi­ums on in­di­vid­ual mar­ket­place plans by 6.8 per­cent. On the small group mar­ket, pre­mi­ums for its HMO plans will rise 9 per­cent and pre­mi­ums for its EPO/PPO plans will rise 6.1 per­cent.

Kelly Smith, se­nior leader for com­mer­cial sales at MVP, said ris­ing prices and in­creased use of med­i­cal ser­vices is the pri­mary driver of pre­mium hikes, though she too ref­er­enced the health in­surance tax as a con­trib­u­tor.

“Cost is al­ways an im­por­tant fac­tor when se­lect­ing a health plan,” she said. “How­ever, our mem­bers value great ser­vice and prod­ucts such as telemedici­ne, well­ness in­cen­tives, and a na­tional net­work of providers that can com­ple­ment their life­style and cre­ate an ex­pe­ri­ence that feels per­sonal.”

CDPHP, based in Al­bany, will raise pre­mi­ums for its in­di­vid­ual mar­ket­place plans by roughly 6.5

per­cent — a slight de­crease from the 7 per­cent hike it had ini­tially sought. Pre­mi­ums for its small group plans will in­crease roughly 4.3 per­cent for most en­rollees and 5.4 per­cent for en­rollees choos­ing a CDPHP Uni­ver­sal Ben­e­fits, Inc. plan.

The Al­bany-based in­surer also blamed the health in­surance tax for ris­ing costs, along with ris­ing pre­scrip­tion drug prices, hospi­tal con­sol­i­da­tion, gov­ern­ment man­dates and fees.

“The (health in­surance tax) af­fects nearly ev­ery­one, in­creas­ing the cost of health cov­er­age for in­di­vid­u­als, fam­i­lies, small and large busi­nesses, se­niors, states and tax­pay­ers,” CDPHP President and CEO John Bennett said.

Fidelis Care will raise pre­mi­ums on its in­di­vid­ual mar­ket­place plans by roughly 3.9 per­cent. It had re­quested a 6.8 per­cent in­crease.

Fidelis does not of­fer plans on the small group mar­ket.

Fed­eral tax cred­its avail­able un­der the Af­ford­able Care Act should help mit­i­gate ris­ing costs for low-in­come New York­ers who pur­chase plans on the ex­change. Ad­di­tion­ally, in­di­vid­u­als who pur­chase an Es­sen­tial Plan will con­tinue to see monthly pre­mi­ums of $20 or less.

In­di­vid­u­als with em­ployer-spon­sored health in­surance are also see­ing their pre­mi­ums grow.

A report re­leased last month by the New York State Health Foun­da­tion and Health Care Cost In­sti­tute shed light on the sec­tor, and found that ris­ing prices are the main thing driv­ing ris­ing health care costs, as op­posed to an in­crease in peo­ple us­ing health care ser­vices.

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