New York health exchange plans get average 7.1% rate bump
By Bob
Herman
August 3, 2015 - Modern Healthcare
Health insurance
premiums on New York's state-run exchange will go up by an average
of 7.1% next year. But rates differ greatly by payer, plan type and region,
highlighting the difficulties of relying on crude averages.
For example,
Oxford Health Plan enrollees will see their monthly premiums drop 12.3% in 2016,
whereas people with Health Republic Insurance of New York will have to pay 14%
more. A recent Kaiser
Family Foundation analysis also found that the second-lowest-cost silver
plans, which are the benchmark for setting the Affordable Care Act's premium
subsidies, will only increase by 0.5% next year in New York City.
gIt's
not all that surprising to see a wide range of premium increases,h said Josh
Weisbrod, a partner at the healthcare practice of consulting firm Bain & Co.
gThis is the first year where the participating payers were able to use actual
trend data on the exchange enrollees.h
Seventeen companies are selling
health plans on New York's exchange next year, making it one of the most
competitive markets in the country. Close behind is California, which announced
last week that premiums will increase by 4%
on average next year.
For some of New York's dominant exchange
insurers, premiums will not jump sharply, if at all. Fidelis Care controls 20%
of New York's exchange market of about 415,000 people, the most of any insurer
in the state. But its premiums will only increase by 4.7% on average, according
to the state's financial department.
MetroPlus Health Plan, which has a
7% market share, is lowering rates by 7% next year. The company lost members in
New York City after it raised rates in 2015. MetroPlus will now offer the
cheapest average silver plan in New York City next year, costing $369 per month.
Cynthia Cox, an associate director at the Kaiser Family Foundation who
studies the ACA's exchange markets, said premium decreases show that insurers
are reacting to evolving consumer habits. People in the individual market are
slowly treating health insurance as a commodity, which may push insurers to keep
prices competitive.
gA lot of exchange consumers were willing to shop
around last year,h Cox said. gSome plans that raised their rates saw a decrease
in their market share. It's possible that people can change plans much more
easily now.h
Low premiums have been a pitfall for some. Health Republic,
the state's not-for-profit co-op plan created with loans authorized by the ACA,
has a statewide market share of 19%. Like many co-ops, Health Republic appealed
to many people through its low prices. That led to higher-than-expected
enrollment, but also larger-than-anticipated losses, according
to HHS' Office of Inspector General. Health Republic lost $35 million in
2014, about seven times what it expected, and the rate hikes were approved to
offset that deficit.
Weisbrod said health insurance remains a
"hyperlocal" business and that premium rate increases or decreases are
reflective of the specific geography. Cox added that instances of double-digit
premium hikes are isolated. Her research shows rates are going up more in 2016
than the year before, but increases are still modest overall.
gIt's not
the doom and gloom,h Cox said.
Oscar Insurance Corp., a nascent insurer
known for its emphasis
on technology, gained a bigger foothold of the exchange market in the past
year. Its enrollment share went from 1% to 5%, and the company will raise rates
by 4.5% next year.
Bob Herman covers the health insurance industry
and other healthcare news. Before joining Modern Healthcare in 2014, he covered
hospital finance as a reporter and editor at Beckerfs Hospital Review. He has a
bachelor's degree from Butler University in Indianapolis