DFS Announces 2018 Health Insurance Rates in a Continued Robust New York Market
Rates for Individuals More Than 55% Lower Than Before Implementation of the Affordable Care Act, After Adjusting for Inflation and Before Federal Tax Credits
Rates for Individuals More Than 55% Lower Than Before Implementation of the Affordable Care Act, After Adjusting for Inflation and Before Federal Tax Credits
Average 2018 Cost of Coverage for Individuals Purchasing Lowest Cost Silver Plans Among NY State of Health Enrollees Will Decrease Up to 5% Compared to 2017 Rates
Overall Requested Rate Increases for Individual Coverage Reduced by Over 3.8%, Saving Consumers More Than $59 Million
Overall Requested Rate Increase for Small Group Coverage Reduced by 2.4%, Saving Small Businesses $166 Million
15 Insurers in Individual and 20 Insurers in Small Group Market Providing Choice to New Yorkers in Every County Across the State
Overall Requested Rate Increases for Individual Coverage Reduced by Over 3.8%, Saving Consumers More Than $59 Million
Overall Requested Rate Increase for Small Group Coverage Reduced by 2.4%, Saving Small Businesses $166 Million
15 Insurers in Individual and 20 Insurers in Small Group Market Providing Choice to New Yorkers in Every County Across the State
Financial Services Superintendent Maria T. Vullo today announced the 2018 health insurance rates for New York’s individual and small group markets, including rates for the NY State of Health, New York’s official health plan marketplace. The Department of Financial Services (DFS) reduced insurers’ requested 2018 rate increases by more than 3.8 percent overall for individuals, which will save policyholders more than $59 million. The overall average 2018 cost of coverage for individuals who purchase the lowest cost silver level plans – the most popular choice for individuals purchasing on the Marketplace – among NY State of Health enrollees will decrease by as much as 5 percent compared to 2017 rates when federal tax credits are applied. For small group plans, DFS reduced insurers’ requested 2018 rate increases by 2.4 percent, saving small businesses approximately $166 million. More than one million New Yorkers are enrolled in small group plans. Since the ACA, New York has cut the uninsured rate in half and rates for individual coverage are 55 percent lower than they would have been without the ACA, after adjusting for inflation and not including federal tax credits.
“DFS has carefully examined the rates requested by health insurers to reduce the burden of excessive health insurance premium increases on New Yorkers while maintaining competitive markets in the face of rising national healthcare and pharmaceutical costs, compounded by ill-conceived Congressional attempts to repeal or replace the Affordable Care Act,” said Financial Services Superintendent Maria T. Vullo. “New York’s healthcare market continues to be robust, with 15 plans offering individual coverage and 20 plans offering small group coverage and consumers in every county having a choice of coverage. With tax credits for eligible New Yorkers, cost of coverage will actually decrease by as much as 5 percent for those purchasing the lowest cost silver plans on the NY State of Health Marketplace.”
“Many consumers buying plans through the NY State of Health Marketplace will be eligible to receive federal tax credits, reducing the monthly cost of coverage,” said NY State of Health Executive Director, Donna Frescatore. “In many cases, after tax credits, consumers’ costs will be about the same or in some cases lower in 2018. Thousands of NY State of Health Assistors will again be available to help consumers shop the Marketplace for the best value.”
The current federal administration continues to threaten the ACA’s Cost Sharing Reduction (CSR) subsidies for insurers. Superintendent Vullo has submitted a declaration in a pending lawsuit seeking to compel the federal government to pay these subsidies. DFS will continue to fight for payment of the CSRs so that consumers are not further harmed by federal government actions. However, in light of the ongoing uncertainty regarding CSR payments by the federal government, including guidance issued by the Center for Medicare and Medicaid Services (CMS) on August 10, 2017 regarding federal risk adjustment related to CSR, DFS is granting an additional rate factor based on information that insurers had provided to DFS in May 2017 that estimated potential funding loss. The additional factor only applies to the individual rates of silver plans.
Repeated efforts by Congress to repeal, or repeal and replace, the ACA have sought to destabilize the ACA marketplace, and caused some insurers to raise rates to account for the uncertainty. Moreover, administration attempts to repeal or not enforce the ACA’s individual mandate likewise have caused destabilization of the market. As a result, fewer younger and healthier individuals are purchasing coverage, impacting the risk pool and causing premiums to rise. Congress also defunded the ACA’s Risk Corridor program, which would have limited insurers’ potential for losses as the ACA was implemented.
“DFS is taking appropriate measures to counter the destabilizing actions of the federal government to protect consumers and help steady New York’s health insurance market,” said Superintendent Vullo. “It is time for the federal government to act to protect our insurance markets and consumers’ health care coverage, by fully paying the cost-sharing subsidies to insurers, enforcing the individual mandate, and addressing the cost drivers of healthcare including ever-increasing pharmaceutical costs. New York will continue to work with all stakeholders to further strengthen our markets and provide comprehensive, affordable healthcare insurance choice to all New Yorkers.”
In addition, in a new federal regulation, the Department of Health and Human Services (HHS) has shortened the open enrollment period by a full six weeks for individuals to sign up for coverage. In a recent letter to HHS Secretary Tom Price, DFS Superintendent Vullo and NY State of Health Director Donna Frescatore opposed this action, noting that it is likely to result in reduced enrollment by healthy individuals, who are needed in the risk pool to keep premiums down.
Underlying medical costs continue to be the main drivers of premium rate increases, reflecting a nationwide trend. For the 2018 individual rates announced today, drug costs account for the largest share (26 percent) of all medical costs, with specialty drug costs increasing about 49 percent. Inpatient hospital costs account for the second largest share of medical expenses (19 percent), followed by physician specialty services (12 percent) and diagnostic testing/lab/x-ray (10 percent).
DFS has advanced initiatives to address rising medical costs, including proposed legislation to authorize the Drug Utilization Review Board to examine high-cost drugs for their appropriate value to be applicable to commercial health insurance, in addition to Medicaid, as well as legislative approval to provide DFS with the authority to ensure necessary regulatory oversight of pharmacy benefit managers, to help control ever growing drug spending.
New Yorkers will continue to have comprehensive healthcare coverage, regardless of federal action. In June, Governor Cuomo directed DFS to promulgate new emergency regulations mandating that health insurance providers do not discriminate against New Yorkers with preexisting conditions or based on age or gender, in addition to safeguarding the 10 categories of essential health benefits guaranteed by the ACA. Earlier this year, DFS took action to ensure that all medically necessary abortion services are covered by health insurance policies without cost sharing and that contraceptives are made available to women with no co-pays or deductibles in amounts exceeding one month’s supply at a time. These first-in-the-nation measures will ensure that essential health services are protected and covered for all New Yorkers.
The Governor also issued an executive order that bans all insurers who withdraw from offering Qualified Health Plans on the NY State of Health Marketplace from future participation in any program that interacts with the Marketplace, including Medicaid, Child Health Plus, and the Essential Plan. The order also directs state agencies and authorities to ban insurers who withdraw from the NY State of Health Marketplace from contracting with the state and to consider all available actions to protect New Yorkers’ access to quality healthcare.
Individual Market
Approximately 350,000 New Yorkers are enrolled in an individual commercial plan. DFS reduced insurers’ total weighted average increase requested for individuals from 17.7 percent to 13.9 percent. These rates will be reduced for many consumers due to federal tax credits. For example, overall average 2018 cost of coverage for individuals who purchase silver level plans – the most popular choice for individuals purchasing on the Marketplace – will decrease approximately 5 percent compared to 2017 rates when federal tax credits are applied.
Rates for individuals are more than 55 percent lower than prior to the establishment of the NY State of Health in 2014, adjusting for inflation but not counting federal financial assistance that the ACA makes available to many consumers purchasing insurance. Under the ACA, financial assistance through federal tax credits for those who qualify will increase in 2018. Households between 200 percent of the federal poverty level, which is the highest level to qualify for the Essential Plan, and 400 percent of the federal poverty level ($48,240 for individuals and $98,400 for a family of four) qualify for federal tax credits, which will reduce premium costs. In 2016, nearly 60 percent of individuals who enrolled in a Qualified Health Plan on the Marketplace received financial assistance, which significantly mitigated the impact of premium increases for these individuals.
These rate increases will not impact the Essential Plan, available only through the NY State of Health, which will still have premiums of $20 or less for lower income New Yorkers who qualify. More than 650,000 New Yorkers are projected to be enrolled in the Essential Plan in 2017. Information about the Essential Plan, including income levels and the services it covers, is available here.
Small Group Market
More than one million New Yorkers are enrolled in small group plans. Insurers requested an average rate increase of 11.7 percent in the small group market. DFS cut the requested rate increases by 2.4 percent to 9.3 percent for 2018, saving small businesses $166 million. A number of small businesses will also be eligible for tax credits that may lower those premium costs even further.
INDIVIDUAL
| Company | Original Requested 2018 Rate Actions | Revised Requested 2018 Rate Actions | DFS Approved 2018 Rate Actions | DFS Modification | Additional Adjustment to Account for Loss of CSR Funding | Final Approved 2018 Rate Actions | Marketshare1 |
|---|---|---|---|---|---|---|---|
| Care Connect (NorthShore)* | 29.7% | 29.7% | 23.1% | -6.6% | 0.4% | 23.5% | 9.1% |
| CDPHP* | 15.2% | 15.2% | 14.9% | -0.3% | 0.3% | 15.2% | 1.4% |
| Crystal Run Health | 8.7% | 8.7% | 6.8% | -1.9% | 0.0% | 6.8% | 0.0% |
| Emblem (HIP)* | 24.9% | 24.9% | 21.1% | -3.8% | 0.4% | 21.5% | 5.0% |
| Empire2* | 16.0% | ||||||
| Excellus* | 4.4% | 5.1% | 4.2% | -0.9% | 0.2% | 4.4% | 7.0% |
| Fidelis* | 8.5% | 10.9% | 9.6% | -1.3% | 0.6% | 10.2% | 21.3% |
| Healthfirst Ins Co, Inc. | 13.0% | 13.0% | 12.3% | -0.7% | 0.0% | 12.3% | 0.0% |
| Healthfirst PHSP, Inc.* | 22.1% | 22.1% | 16.6% | -5.5% | 1.1% | 17.7% | 9.0% |
| HealthNow* | 47.3% | 47.3% | 31.1% | -16.2% | 0.4% | 31.5% | 3.2% |
| IHBC* | 25.9% | 30.8% | 22.3% | -8.5% | 0.0% | 22.3% | 1.2% |
| MetroPlus* | 7.9% | 7.9% | 6.0% | -1.9% | 1.1% | 7.1% | 2.5% |
| MVP Health Plan* | 13.5% | 14.0% | 13.3% | -0.7% | 1.1% | 14.4% | 8.7% |
| Oscar* | 11.1% | 14.1% | 11.3% | -2.8% | 0.1% | 11.4% | 13.5% |
| United Healthcare* | 38.5% | 38.5% | 19.5% | -19.0% | 0.5% | 20.0% | 1.8% |
| All Companies 3 | 16.6% | 17.7% | 13.9% | -3.8% | 0.6% | 14.5% | 100.0% |
1 Marketshare is based on percentage of total enrollment of the companies listed for the given market.
2 No increase is shown for Empire because it is offering new products.
3 Weighted Average.
* Indicates the Company offers products on the NY State of Health Marketplace.
SMALL GROUP
| Company | Original Requested 2018 Rate Actions | Revised Requested 2018 Rate Actions | DFS Approved 2018 Rate Actions | DFS Modification | Marketshare1 |
|---|---|---|---|---|---|
| Aetna | 14.2% | 14.9% | 9.1% | -5.8% | 6.1% |
| Care Connect (NorthShore)* | 19.3% | 19.3% | 15.5% | -3.8% | 7.3% |
| CDPHP | 21.1% | 21.1% | 20.4% | -0.7% | 0.2% |
| CDPHP UBI | 8.6% | 9.0% | 9.0% | 0.0% | 3.2% |
| Crystal Run Health Ins | 0.0% | 0.0% | -3.1% | -3.1% | 0.3% |
| Crystal Run Health Plan | 3.9% | 3.9% | 0.8% | -3.0% | 0.1% |
| Emblem (HIP) | 8.5% | 8.5% | 8.1% | -0.4% | 0.9% |
| Empire Assurance | 12.9% | 12.9% | 9.8% | -3.2% | 0.6% |
| Empire HMO | 13.8% | 13.8% | 13.3% | -0.5% | 0.7% |
| Excellus* | 8.0% | 8.9% | 8.9% | 0.0% | 17.4% |
| Healthfirst Health Plan | 10.0% | 10.0% | 6.1% | -3.9% | 0.0% |
| HealthFirst Ins Co | 10.0% | 10.0% | 4.9% | -5.1% | 0.0% |
| HealthNow* | 8.9% | 8.9% | 8.6% | -0.4% | 8.2% |
| IHBC* | 14.5% | 14.5% | 13.9% | -0.6% | 4.2% |
| MetroPlus* | 5.1% | 7.1% | 6.0% | -1.1% | 0.1% |
| MVP Health Plan* | 8.5% | 9.5% | 9.5% | 0.0% | 0.3% |
| MVP HSC | 11.7% | 12.8% | 12.6% | -0.2% | 6.3% |
| Oscar | -3.2% | -3.2% | -3.2% | 0.0% | 0.0% |
| OHI | 11.4% | 11.4% | 8.1% | -3.2% | 44.1% |
| United Health of NY | 15.2% | 15.2% | 8.1% | -7.2% | 0.1% |
| All Companies2 | 11.5% | 11.7% | 9.3% | -2.4% | 100.0% |
1 Marketshare is based on percentage of total enrollment of the companies listed for the given market.
2 Weighted average.
* Indicates the Company offers products on the NY State of Health Marketplace.
Total enrollment in the Individual Market as of 3/31/2017 was 348,709
Total enrollment in the Small Group Market as of 3/31/2017 was 1,133,247