ALBANY – The state on Thursday approved an average 5.7 percent rate increase for health insurers in 2015, spurning their request for a 13 percent hike.
Insurers in July cited growing costs in their rate requests. But the state Department of Financial Services set the rate and said it would be an average of 5.7 percent for individual plans, saying it will save customers about $1 billion next year.
Overall, the agency contended that rates will remain 50 percent lower than they were prior to state’s health care exchange that started Jan. 1. Nearly 1 million New Yorkers enrolled in the health exchange. The next enrollment period starts Nov. 15 for coverage starting on Jan. 1.
For small-group insurance, insurers wanted a 13.9 percent increase. The state reduced it to 6.7 percent.
This development could have implications for California which like New York operates a state-based health benefit exchange that actively negotiates premium rates with health plan issuers.
A measure on California’s General Election ballot in November, Prop. 45, would bring the Golden State in line with New York and a majority of states that require health plan issuers obtain prior regulatory approval before using rates.
Prop. 45 has raised concerns among opponents as well as the state’s health benefit exchange, Covered California, of potential disruption of the individual and small group health insurance market if plan issuers decide they can’t live with approved premium rates lower than those filed. That could possibly lead to plans being withdrawn from regions or all of the state as threatened by the New York state Health Plan Association in this story.
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