NYS 2019 Rate Requests

Last Friday, June 1, 2018, the NYS 2019 Rate Requests filings were released. Great news for SMB!  The total weighted average increases were a modest 7.5%  small groups but  24% for the individual market.  This early filing request deadline request requirement is not an Obamacare requirement.  As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.

These are simply requests and the state’s Department of Financial Services has authority to modify the final rates. But they are the first indication of what New Yorkers can expect when shopping for health insurance on the individual marketplace at the end of this year. The news comes as insurance companies across the country brace consumers for another year of large rate hikes, owing in part to the composition of the individual market, and in part to the uncertainty over the future of the law under the Trump administration.

Background:

By contrast last year’s  NYS 2018 Rate Request early filing request were higher at 11.5% small group but much lower  16.6% for individuals. The NYS final August 2018 rate approval are expected to be lower.  For example, the final filing rates were aproved  NYS 2018 Final Rates at 9.3% small group and 13.9% for individuals. Incidentally, the NYS 2017 Rates final rates were 8.3% small group and 12.3% for individuals.  Using these past figures one projects a 2019 Final Rates of 6.5% small groups and 19% individuals.

With only 3 months of mature claims in 2018 to work of off Insurance Actuaries have little experience to predict accurate projections. Simply put the less credible information presented to actuarial the higher the uncertainty and higher than the expected rate increase.  The national rate trend, however, has been much higher than in past years due to higher health care costs and the loss of Federal reinsurance fund known as risk reinsurance corridor.

Summary of 2019 Requested Rate Actions

Individuals:

 

Individual rates are expected to be higher than the small group market. The national rate trend, however, has been much higher than in past years due to higher health care costs  Like other states throughout the nation, the 2019 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program.  The loss of the program’s aka federal risk reinsurance corridor funds accounts for 5.5 percent of the rate increase.

The single biggest justification offered by insurers for the requested increases is the recent repeal of the individual mandate penalty –Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019. The individual mandate, a key component of the Affordable Care Act, helped mitigate against dramatic price increases by ensuring healthier insurance pools.  Insurers have attributed approximately half of their requested rate increases to the risks they see resulting from its repeal.  Without the federal action, the average requested rate increase  would be  12.1%.  As DFS reviews all of the submissions, we will continue to ensure that any rate increases are fully and actuarially justified by appropriate medical cost increases and are not inadequate, excessive or unfairly discriminatory, in accordance with New York law.

Small Groups:

Most encouraging to see the average rate requests for the small group market reflect the increased stability of that market in New York State. The combination of 2-50 and 51-100 market underscores the stability for msall bsuinesses under 50 employees.  Prior to the NYS regulatory combination, the 2-50 market was running an average 12-13% trend.

The Obamacare  health insurance tax, aka The HIT, is responsible for approximately  2.5%.  Whiel the HIT moratorium was approved it had indeed come back last year. The total projection is $14 Billion.  Notably, Empire Blue Cross has filed a modest 6% increase as their portfoliio is running stable. Additionaly, Oscar’s inbdustry low 3% filing is practially at break-even considering the HIT.

THE THREE R – RISK CORRIDOR, RISK ADJUSTMENT & REINSURANCE designed to mitigate the adverse selection and risk selection. The problem, according to many insurance companies, is that the formula is flawed, and CareConnect executives have consistently complained that they are at an unfair disadvantage. The Cuomo administration has taken steps to ameliorate some of those problems, giving the DFS the authority to essentially overrule the federal numbers.  In its first-quarter financial report, executives made clear that the risk adjustment penalty was a threat to its business.

Company Name2019 Requested Rate Change
Aetna Life16.2%
CDPHP6.7%
CDPHP UBI6.1%
Crystal Run Health Insurance Company11.5%
Crystal Run Health Plan, LLC12.5%
Emblem12.0%
Empire Healthchoice Assurance6.0%
EmpireHealthchoice HMO5.2%
Excellus*3.8%
Healthfirst Health Plan, Inc.21.0%
Healthfirst Insurance Company, Inc.7.0%
Healthnow New York-0.1%
IHBC*3.8%
MetroPlus*4.7%
MVP Health Plan7.0%
MVP Health Service Corp*10.3%
Oscar3.0%
Oxford Health Insurance Inc*8.3%
UnitedHealthcare Ins Company of New York7.2%
Weighted average:7.5%

Conclusion

Defined Contribution Choice:  Instead, the correct approach for a small business in keeping with simplicity is a defined contribution model using a Private Exchange.  This is a true defined contribution empowering employees with the 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 OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.

To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.

Resource

  • You may view the NYS 2019 Rate Requests DFS press release, which includes a recap of the increases requested and approved bclicking here.
  • For a custom analysis detailing YOUR upcoming 2018-2019 renewal please contact our team at Millennium Medical Solutions Corp  (855)667-4621.  We work in coordination with Navigators to assist with Medicaid, CHIP Child Health Plus, Family Health Plus and Medicare Dual Eligibles.   We have Spanish, Russian, and Hebrew speakers available.  Quotes can also be viewed on our site.
  •  See Health Reform Resource

*These averages may change based on DFS’s review of the rate applications.** Empire submitted a filing that DFS is evaluating.

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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