Insurers on the New York health exchange are requesting rate hikes averaging in excess of 17%, with UnitedHealthcare going as high as a whopping 45.6%.
UnitedHealthcare has already announced that they would exit most of the Affordable Care Act state exchanges in which they operate in 2017, New York being one of the few exceptions.
The biggest health insurer in the country announced that it lost $475 million on the ACA exchanges last year and could lose another $500 million this year.
They explained that states in which they would continue to serve – like New York – would be done so on an “effective and sustained basis.”
‘Effective and sustained’ appears to require a nearly 50% hike in your health insurance premiums.
Via Crain’s New York:
New York insurers selling policies on the state’s Obamacare exchange are asking regulators to approve large premium increases as a way to counteract rising costs, and in some cases, gargantuan losses.
Insurers selling plans to individuals on the New York State of Health marketplace requested an average increase of around 17% and those selling small-group plans asked for an average rate hike of about 12%.
New York State of Health has seemed to be more stable than other markets nationally, but insurers here haven’t been immune to national trends that are driving up health care spending and increasing the costs of providing health insurance.
In a statement Wednesday afternoon, the New York Health Plan Association said the hikes are necessary. “The 2017 rate submissions reflect increases that are the direct result of the underlying cost of care and marketplace changes that continue to impact health plans’ operations,” Paul Macielak, HPA’s president and chief executive, said in a statement.
While New York has denied full rate requests for most of the insurers offering plans through NY State of Health in the last two years, they may no longer have the luxury to do so.
Last year Health Republic, the nation’s largest, and New York’s only Obamacare co-op, had to be shut down by state regulators because they were hemorrhaging money. The Centers for Medicare and Medicaid Services gave $355 million in low-cost loans to Health Republic, who managed to turn it into an $80 million loss.
The massive losses were due in large part to Health Republic repeatedly asking for lower premium rates than other insurers. A Crain’s investigation showed that the insurer consistently “set low premium rates as a marketing ploy to attract customers,” but then would be denied increases from state regulators when finances became unsustainable.
Reality may now dictate that regulators would need to approve these current rate hikes to avoid a disastrous repeat.
In 2014, Forbes Magazine warned that New York health insurers would have to raise costs to remain sustainable.
While the New York Obamacare exchange had been touted as one of the more successful in the country, their approach has “continued to make insurance needlessly expensive for the healthiest and youngest enrollees, especially middle-class, uninsured families seeking affordable health insurance.”
They also warned that New York has a limited amount of time to make their exchange self-sustaining and get medical costs under control. If not, they will saddle “consumers and taxpayers with ever higher costs.”
Saddle up, New York.
This is simply a continuation in the upward trend in health care costs for the Empire State.
Cross-posted at the Mental Recession