NYS 2019 Final Rates Approved    

NYS has approved  2019 Final Rates last Friday. Small group rates will increase 3.8% and 8.6% for individuals.

As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2019 Rate Requests.  Despite only 3 months of mature claims data experience for 2018  health insurers’ original requests were noticeably below average 7.5% for small group and 24% for individuals.  Ultimately NYS reduced this request substantially by approximately 50%.

Experts are concerned over the long term effects. Example, the Individual  mandate was removed last December by Presidential order. Without the Mandate anyone can drop insurance without penalty.  A comparable take away for similar auto insurance industry would be something like this -Drivers ought not be mandated to buy auto insurance as its a profit scheme by Insurers. While a popular decision this will hardly bend the curve long term and reduce competition.  Furthermore, the new order of Selling Across State lines makes NYS most unwelcoming.

OTHER STATES

Insurers have been filing to sell Obamacare plans that will go into effect in 2019, and in some states they appear to be pricing in for the fact that the mandate is going away next year. Other states are seeing mild increases, but that is in part because they saw significant hikes for the previous year.

Insurers have concluded that fewer people will enroll without the mandate than otherwise, so in some places they are pricing their plans higher based on the assumption that sicker people will be left behind, which will increase medical costs for those left. It is well worth pointing out that in recent years the loss federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.

How are neighboring States doing?

In NJ, not that bad.  Last year the average increase were 5.5% for small groups and some popular plans such as  Horizon Blue Cross Blue Shield’s  OMINA  increasing only 4.8% increase.   This year the increase is only 5.2.  Other insurers offering EPO and HMO plans in the individual market for 2019 include Oscar Health and Oxford Health Plans.

With individual mandate repeal fewer people will buy health insurance raising the prices for those who do. NJ Banking and Insurance Department officials said premium prices would have increased, on average, by 12.6 percent.

For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases last year.  The 2019 proposed rate increases for both the individual and small group market are, on average lower, than last year: The proposed average small group rate increase request is a 10.22 percent and ranges from -5.0 percent to 21.1 percent. This compares to the average increase request of 18.06 percent requested last year.The proposed average individual rate increase request is 12.3 percent and ranges from -10.9 percent to 31.0 percent. This compares to the average increase request of 25.51 percent requested last year.

Final plan rates in New Jersey & CT will be finalized and released in the fall, state officials said. ACA open enrollment begins Nov. 1

  • Trend: Trend is a factor that accounts for rising health care costs, including the cost of prescription drugs, and the increased demand for medical services.
  • Uncertainty in Washington:
    • Removal of penalty for individual mandate: The elimination of the penalty means that individuals who are typically younger and healthier would have no inducement to participate in the insurance pool, which could further destabilize the market. Lack of participation shrinks the pool and increases the cost of insurance to the remaining members.
    • Short-duration health plans and Association Health Plans: Still pending are final federal regulations on non-ACA compliant short-duration plans, which may have implications for the ACA risk pool. Also, Connecticut along with other state insurance regulators, are awaiting clarification from the federal government on new federal regulations allowing association health plans, which could further shrink the ACA risk pool.

 A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.

Finally, a tax on health insurance premiums has been reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested for 2019 and for  2019

SMALL GROUP MARKET VS.  INDIVIDUAL MARKET

Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit. Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealth plans to exit most Exchanges see –  Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.

The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll.  Both employee and employers still gain tax advantage benefits under the business.  Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.

Learn how a Private Exchange and our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.

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