Health insurance providers are seeking to increase the average rate by 18.7% next year for individuals and 16.5% for small group plans, according to state records.
The proposed premium rate increases have gone beyond recent years. Insurers have cited, in part, the ongoing health-related costs of COVID-19 and inflation as reasons for seeking to increase the rate.
The changes will affect millions of New Yorkers enrolled in individual plans and small groups directly through private insurance companies or through the state’s health exchange, the NY State of Health.
Now, the state Department of Financial Services, which regulates insurance companies, will review the quotes and consider adjustments before finalizing the 2023 rates in August. Historically, the state agency has lowered rates significantly from those sought by insurers.
Last year, for example, regulators approved average rate increases of 3.7% for individuals and 7.6% for small group plans. That was down from the 11.2% and 14%, respectively, sought by insurers.
However, higher-than-normal increases in the insurance rate sought for 2023 join the growing list of cost increases currently hitting New Yorkers who are grappling with historically high prices for everything from food and gasoline to housing.
Eric Linzer, president and CEO of the state Health Plan Association, which represents insurance companies, emphasized that inflation and pandemic-related costs have joined the longstanding issues of rising drug prices and health care costs to raise prices.
“Health insurance premiums are directly linked to the base cost of care, and continued growth in health care costs increases insurance premiums,” he said in a statement.
Some of the COVID-19 issues affecting insurance companies have included the cost of testing, treatment, and vaccines. The insurer’s trade group noted that the influx of New Yorkers now seeking care that was delayed earlier in the pandemic is another factor driving up costs.
Linzer urged regulators to ensure that final approved insurance rates for next year “fully reflect the contributing factors to the growth of health care costs,” and to avoid negative impact on the health plan’s efforts to provide New Yorkers with access to affordable, high-quality health care.
The insurance business group also emphasized that lowering premium rate requests could negatively impact programs that seek to reduce health disparities and improve the health and wellness of New Yorkers.
However, state regulators have stated in recent years that their goal is to agree to final insurance rates that represent both the costs faced by health plans and the general economic pressures facing New Yorkers.
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For more details about rate hike requests for a specific health plan, visit the Department of State Financial Services website at dfs.ny.gov, or call the agency’s hotline at (800) 342-3736.
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