NYS Small Group and Individual Rate Approval
2019 Small Group and Individual rates have been approved by the NYS State Legislature. KBM’s advice – don’t get too excited.
Let’s start with the ‘hype’ put out by NYS Department of Financial Services (DFS): NY slashes health insurance rate hike requests by 64 percent. If you twist the numbers associated with the initial rate requests, versus what was approved, you can eventually get to this number.
The DFS Press Release presents big numbers associated with their approach to this year’s rate requests, and their actions. It’s important to remember that this is an election year, and every press release seems to have a bit more ‘zip’ to it.
Here’s the reality of the 2019 New York Small Group rates: North of New York City there are limited health insurance carrier options. Excellus BlueCross BlueShield, the carrier possessing the second highest market share in NYS, asked for a 3.8% overall increase – and received it. MVP Healthcare had only a minor reduction applied to their rate request. CDPHP and Empire BlueCross BlueShield also had only minor reductions.
There are some carriers in the New York City area that faced significant reductions in their requests by the Legislature. However, it’s important to look at the market share of those carriers. For example, Metroplus was handed a 103% reduction in their requested rate; but they only insure 0.1% of the NYS population.
It’s recently become common for those with a January 1st health insurance renewal to receive your new rate at the beginning of the 4th Quarter. That will continue to be the case this year. This allows employers to assess the increase applied to their plan, evaluate viable alternatives, and educate their eligible employees before open enrollment.
Under the ACA the Department of Health and Human Services requires insurance carriers to apply an Actuarial Calculator to determine the Metal levels (Platinum, Gold, Silver and Bronze) associated with the non-grandfathered plans they offer the public. This calculator is adjusted yearly to apply an ever increasing out of pocket expense level to each plan. If a plan no longer fits into its current metal level based on the application of the calculator, the benefits must be adjusted. The plan we have at KBM is a ‘Silver’ level plan. From 2017 to 2018 the individual deductible increased from $1800 to $2000 for this reason. So, even though we’re still in the same plan (Silver 2), the benefits noticeably changed. We’ll know those plan level adjustments at the time 1st quarter rates and plans are released (early October). Those plan changes will also be applied to those groups who renew their health insurance in later months during the year.
Although we have to wait, we can start planning. Employers can use the approved rate increases to budget for 2019 health plan expenses. We can address any plan changes once the rates are released in October. And remember, its an election year. While the rhetoric will be ratcheted up, life and business will go on.