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Regulators face delicate balance in trimming Obamacare rates

Cynthia Cox is the associate director of health

Cynthia Cox is the associate director of health reform and private insurance at the Henry J. Kaiser Family Foundation in Washington. Photo Credit: Henry J. Kaiser Family Foundation

Regulators may reduce the 16.6 percent increase in Obamacare individual insurance rates that insurers have requested in New York by about 3 percentage points, if previous years are a precedent.

But industry experts warned that if the state were to cut the increase request too aggressively, insurers could leave the marketplace.

On Wednesday, the state Department of Financial Services posted rate requests from 16 insurers who plan to offer Obamacare in New York in 2018. The state has final say on what they can charge.

In each of the past two years, the state reduced insurers’ rate requests. In 2016, insurers had requested a 19.3 percent increase, and the state approved a 16.6 percent increase.

The prior year, insurers asked for a 10.4 percent hike, and the state knocked the increase down by more than 3 percentage points to a 7 percent increase.

The state faces a delicate balancing act in adjusting the rates.

Insurance company losses led a number of them to exit from Obamacare markets nationwide in 2017, according to a study by the Henry J. Kaiser Family Foundation, a Washington-based nonprofit that focuses on national health issues.

Nationally, the average number of companies offering coverage per state has dropped from 6 in 2015 to 4.3 in 2017, according to the organization. In some areas of the country, there is just one exchange insurer.

Some residents could have no Affordable Care Act choices in 2018, according to published reports.

“In 2014, insurance companies were dealing with very little information about what the market would look like,” said Cynthia Cox, associate director of health reform and private insurance at Kaiser. “So a lot of insurers lost a lot of money.”

Cox added that 2016 was the first year insurers had real data. This year “insurers made decisions to either significantly raise rates or leave the market. Had the election gone a different way, perhaps 2017 would have been a one-time market correction. We don’t know. But there is uncertainty in the market now.”

About 3.6 million people in New York are covered under the Affordable Care Act, according to the state. About 18 percent of New York’s population was enrolled in the state’s marketplace as of Jan. 31.

Some of the insured could use federal subsidies to ease the burden of the increase, said Janine Logan, senior director, communications and population health, at Nassau-Suffolk Hospital Council, which represents 23 member hospitals on Long Island.

“Depending on income, and the plan, the subsidy will help,” Logan said. “This is if the Affordable Care Act remains. Under the House replacement plan, there are no subsidies for this.”

The 47.3 percent increase for 2018 requested by insurer HealthNow New York was the highest submitted to the state. The 4.4 percent request by Excellus was the smallest individual rate request.

CareConnect, an insurance subsidiary of New Hyde Park-based Northwell Health, requested a 29.7 percent increase in the individual market.

Its rate request for individual plans “reflects the fact that this market has a greater need for medical care than originally anticipated,” CareConnect said in a statement.

2017 Obamacare Stats

Insurers in NY marketplace: 14

U.S. average: 4.3

Source: Henry J. Kaiser Family Foundation

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