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Some LI consumers may see huge health premium hikes

Stephen Faber shows an insurance rate notice in

Stephen Faber shows an insurance rate notice in his auto repair shop in Brightwaters. His cost to cover a worker and his family in an EmblemHealth plan is rising 64 percent from $599 a month to $986. (Oct. 22, 2010) Credit: Ed Betz

Up to 160,000 Long Islanders -- most of them small-business owners or employees -- are facing, on average, 20 percent or higher health insurance premium increases next year, according to the New York State Insurance Department, despite a new state law intended to keep rates down.

On Oct. 1 a new "prior approval" law went into effect that gives the department the authority to deny or reduce health insurers' proposed increases in premiums. Previously, health insurers simply filed their rates with the state.

After the new law went into effect, the insurance department held premium increases statewide to an average of about 10 percent, according to insurance superintendent James Wrynn.

But two health insurers, EmblemHealth -- which includes HIP and GHI -- and Oxford/UnitedHealthcare, filed their increases before the new prior-approval law was enacted, meaning they could increase their rates without approval.

"Unfortunately, some consumers will still see huge increases where companies hiked rates before the law went into effect," Wrynn said.

Insurers cite cost increases
EmblemHealth - the second-largest health insurer in the state, according to a 2010 report by United Hospital Fund, a nonprofit health services research group - attributed about 93 percent of its increases to rising health care costs. It attributed only about 2.3 percent of the increases to the federal health care overhaul.

"The overwhelming percentage . . . [was] driven by medical cost increases due to many factors including: the aging of the covered population, a shrinking base of insured individuals, significant increases in hospital reimbursement often fueled by provider consolidations leading to greater hospital market power, increases in the cost of prescription drugs, continued increases in service utilization and the impact of the newly imposed New York State increases in assessments and surcharges," EmblemHealth spokeswoman Ilene Margolin said in a statement.

Oxford/UnitedHealthcare, the third-largest health insurer, said in a statement that it "filed rates under a valid, effective law. We filed rates both before and after the effective date of the new prior-approval law. We believe that all of the referenced rate filings were based on sound actuarial principles."

Small groups targeted
The steepest increases in both companies are for those in small-group policies, which include businesses with two to 50 employees. These policies are typically more expensive than large-group policies, experts said; large companies or unions can self-insure or their rates are set according to the cost of care of that large group.

According to the state insurance department, about 78,000 of Oxford's 398,000 small-group members are in Nassau and Suffolk counties. EmblemHealth has about 82,000 small-group members on Long Island, the insurance department said.

Donald Woodworth, a self-employed contractor from Fort Salonga, got a letter dated Sept. 1 from EmblemHealth telling him that the HIP plan for him and his wife would increase 44 percent to 49 percent, from $834 a month for a plan with no dental or drug benefits, up to $1,242 a month. The year before his insurance had risen 15 percent, he said.

Attorney Steven Feldman of Roslyn got a letter from EmblemHealth in August telling him the HIP plan for him, his wife, also a lawyer, and his children, would increase 33 percent to 38 percent, up to $24,256.32 a year.

"How many families in the United States can afford just under $25,000 a year?" Feldman asked.

Stephen Faber, a partner in Faber Brothers Automotive Repair in Brightwaters, said he had been paying $599 a month for an employee and his family under an EmblemHealth plan. The plan -- which has a $6,000 deductible -- now will cost Faber $985.71 a month, a 64 percent increase.

Faber said he is looking at other health plans. "I really wasn't expecting this," he said.


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