Crain’s Health Pulse
July 3, 2014
Insurers Request Average 13% Rate Hikes
The Department of Financial Services released the rates filed by New York insurers for 2015 under the state's prior-approval law. The filings, available here, reflect a weighted average increase of about 13%. DFS can cut the premiums after its review. A summary of the filed 2015 premiums is online here.
What is driving the rates higher this year? In Empire's view, inpatient and outpatient care at hospitals accounts for the largest share—45% to 55%—of the health care premium dollar in the state. That number is on the rise because of "increasing demand for care, rising costs to hospitals of the goods and services needed to provide care, growing intensity of care needs, and the shifting of costs of Medicaid and Medicare hospital reimbursement reductions to commercial insurers," according to the insurer's rate filing.
Empire also cited the cost of new specialty drugs such as Sovaldi for the treatment of Hepatitis C: $1,000 per pill and $84,000 to complete the 84 pill regimen. And then there's the burden of ACA-related taxes and fees. Empire's projections for those are $48.5 million and $51.4 million, respectively, for 2014 and 2015.
A quick Crain's analysis suggests that rate increases for individuals are rising more slowly in New York City and Long Island than in other areas of the state. Several insurers proposed premium cuts. They were North Shore-LIJ's CareConnect plan (a 15% drop for small groups); Affinity, Healthfirst, UnitedHealthcare and HealthNow. Insurers have tackled a big challenge in setting rates this year for products sold on the New York State of Health, given they had no information about their new customers' utilization trends.