- On Friday, the New York Department of Financial Services released the approved health insurance rates for 2017.
- On average, individual premiums in the state will increase by 16.6%.
- On average, small group premiums in the state will increase by 8.3%
It's not a surprise that health insurance rates would be increasing. The writing had been on the wall when requested premium rates began to trickle in. In May, New York insurers' submitted individual premium rate requests averaged 17.3% for 2017. In addition, a recent analysis by McKinsey & Co., released found aggregate losses in the indivudal market overall for 2015 more than doubled from the previous year, leaving insurers with post-tax margins between -9% and -12%.
Those losses coupled with the fiscal losses as a result of the risk adjustment and risk corridor programs would justify premium rates as the insurers want to see a profit on the ACA exchange market or at least stay in business.
Charles Gaba, ACASignUps.net blogger, stated New York is the second state after Oregon to release its approved rates for next year.
The "federal risk adjustment program, under which insurers with healthier enrollees are supposed to pay insurers with less healthy enrollees, has caused significant shifts in dollars among plans, requiring some insurers to make substantial payments under the program," the New York Department of Financial Services stated in a prepared release. "In order to better achieve the goals of this risk adjustment program, DFS is examining possible future actions to address disparities caused by the program in New York."
While the average individual rate increase was 16.6%, it's important to note only four of the 17 companies listed by DFS had an approved premium percentage increase under double-digits. In fact, one company's increase looks downright scary at an 80.5% increase (Crystal Run Insurance Company). Some notable rate increases include UnitedHealthcare's ACA product (28%, down from 45.6% requested rate), Oscar (11.5%, down from 26.8% requested rate) and NorthShore-LIJ's ACA product (29.2%).
With many insurers planning to exit ACA exchanges next year (even Aetna who had stood besides the market through thick and thin is rethinking its position), the fate of the ACA market does seem a bit shaky. Because of these events, there have been no shortage of explainers and think pieces on the possible fate of the ACA marketplace recently. Modern Healthcare's Bob Herman notes as of June 30, about 4.7 million of the 20 million Americans that have received health coverage as a result of the ACA bought their products across seven for-profit carriers.
It's an understatement to mention that something has to change for the individual market to stabilize. That said, as noted by the approved New York premium rates, things are changing. But are those changes benefiting potential enrollees that are desperately needed to help the markets stabilize?