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DFS Releases Approved Premium Rates

Crain’s Health Pulse; 9/5/2014

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In a move hailed by patient advocate groups and blasted by insurers, Department of Financial Services Superintendent Benjamin Lawsky approved premium rates for next year far lower than those requested by ���������� insurance companies. For the individual and small-group markets, DFS, on average, halved proposed premium-rate increases, which the agency estimated would save ���������� health insurance policyholders $1 billion in 2015.

In the individual market, insurers, on average, requested a 12.5% hike, which DFS cut to an average increase of 5.7%. In the small-group market, companies asked for nearly 14% higher rates. DFS approved an average increase of 6.7%. A chart of the requested and approved rates for both markets is��.

“While we have made substantial progress in reforming our health care market and holding down costs, there is much more work ahead,” Mr. Lawsky said in a statement. “We will continue to engage with consumer groups, insurers, providers and other stakeholders as we move forward with that effort.”

Insurers have long opposed the return of ����������’s prior-approval power, and ���������� Health Plan Association President Paul Macielak predictably called the rate-setting process “seriously flawed” and “irresponsible,” based on the “inadequate” approved rates that “do not reflect actuarial reality.”

“The bottom line is inadequate rates will result in reducing product choice or otherwise destabilizing the market, which is ultimately harmful to the health care system as a whole, and to the consumers who rely on it,” Mr. Macielak said.

That’s not how advocates see it. The 5.7% average increase is “the lowest approval in memory,” said Elisabeth Benjamin, a co-founder of the Health Care for All ���������� consumer coalition, and vice president of health initiatives at the Community Service Society of ����������. She said the rate levels are consistent with those in California, which held to a 4.2% increase. She downplayed the lower-premium risks to insurers, saying that the ACA is working as it is supposed to in accounting for higher-risk patients.

In the individual market, the largest approved rate hike is 13.04% for Health Republic, while the largest cuts are more than 15% at Affinity and United Healthcare. For small groups, rates will rise 14.4% at MetroPlus and by more than 12% at Excellus, MVP and Empire HealthChoice. The largest decrease is at CareConnect, a new insurer that requested a 14.6% decrease to adjust to its actual experience during its first year in the market.

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