emergency-sign-at-hospital-300x201-7290191Health insurers’ rate applications for 2019, which became public late Friday, raise red flags about the condition of New York’s non-group market.

Health plans are bracing for an exodus of healthier customers when the repeal of Obamacare’s individual mandate takes effect in 2019. In response, they’re seeking to hike individual premiums by a weighted average of 24 percent—the largest in a five-year streak of double-digit increases—which will undoubtedly push more people to drop coverage.

Those self-reinforcing trends signal the possible return of a “death spiral,” the phenomenon that virtually killed New York’s individual insurance market before the advent of the Affordable Care Act.

screen-shot-2018-06-04-at-6-15-14-pm-4978084Facing the most dramatic increases are the more than 100,000 customers of Fidelis Care, the state’s largest provider of non-group coverage. Fidelis—a Catholic-affiliated plan in the process of being sold to for-profit Centene Corp.has requested premium hikes averaging 38.6 percent.

If those rates are approved, it would go from having the lowest average premium on New York’s Obamacare exchange to being sixth-highest out of 14 plans.

At the other end of the spectrum, Schenectady-based MVP Health Plan is requesting a modest 6.5 percent, Albany-based CDPHP is looking for 5.1 percent and Buffalo’s Healthnow New York is proposing to cut premiums by 3.2 percent.

On average, plans attributed half of their proposed increases to the repeal of the individual mandate, which required most Americans to buy coverage or pay a tax penalty. When the penalty goes away in 2019, it’s expected that some healthier consumers will drop coverage – but there is no consensus about how many.

Projections by plans vary widely. Mandate repeal accounts for 25.9 points of the 38.6 percent hike requested by Fidelis, but just one point for New York City Health + Hospitals-affiliated MetroPlus and zero for CDPHP and Healthnow.

Even without the impact of mandate repeal, the plans’ requested rates would still be rising by an average of 12.1 percent—driven largely by higher costs for hospital visits, physician care and prescription drugs.

Meanwhile, enrollment in the state’s commercial non-group market is trending down—from 397,000 in 2014 (the first year of Obamacare) to 318,000 now. Much of that decline is likely due to the advent in 2016 of the state-funded Essential Plan, which offers low- or zero-cost coverage to lower-income New Yorkers. Fidelis is projecting that non-group enrollment will plunge by another 37 percent in 2019.

To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.

However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.

The proposed rates are subject to approval by the state Department of Financial Services, which typically sets final premiums somewhat lower than those requested by plans. Its decisions are due in late summer.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

New York’s Shrinking Budget for Public Health Deserves More Attention

As Medicaid costs spiraled over the past decade, other parts of the state Health Department were losing money and staff—leaving New York with diminished public health resources when the pandemic struck last year. Read More

The Cuomo Administration Releases More Data on Coronavirus Deaths in New York Nursing Homes

The state Health Department has revealed additional detail about coronavirus deaths in New York nursing homes, showing for the first time how many residents of each home died of COVID-19 outside of the facility, typically in a hospital. Read More

The State’s Vaccine Appointment System Was Not Ready for Prime Time

The two top priorities Governor Cuomo identified in his State of the State speech Monday morning were "Defeat COVID" and "Vaccinate New York." Read More

As a Supreme Court Ruling Loomed, Cuomo Bent His Own Rules on COVID ‘Clusters’

In the midst of the constitutional showdown over his pandemic policies, Governor Cuomo made changes to a disputed Brooklyn 'cluster zone' that seemed to contradict his own declared guidelines. Read More

New York’s Rising COVID Curve Casts Doubt on Cuomo’s ‘Micro-Cluster’ Strategy

The ongoing surge in New York's coronavirus pandemic raises doubts about the effectiveness of Governor Cuomo's "micro-cluster" strategy. Read More

The Autumn Coronavirus Wave Is Hitting New York’s Nursing Homes, Too

Coronavirus infections are again rising in New York's nursing homes, a sign that blanket testing, tight limits on visitors and other precautions have not fully isolated their acutely vulnerable residents from conditions in Read More

Here’s Why Coronavirus Infection Rates Are Rising as ‘Positivity’ Stays Stable

A growing disconnect between two coronavirus benchmarks – the positivity rate and the infection rate – is stirring confusion about New York's pandemic outlook. Read More

‘Clusters’ Drive a Widespread Surge in New York’s Coronavirus Infection Rates

New York's coronavirus infection rates have surged to their highest levels since May, pushing 10 counties – including Brooklyn, Rockland and Orange – above a threshold that the Cuomo administration uses to justify travel restrictions on other states. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo "...the Empire Center is the think tank that spent months trying to pry Covid data out of Mr. Cuomo's government, which offered a series of unbelievable excuses for its refusal to disclose...five months after it (the Empire Center) sued, Team Cuomo finally started coughing up some of the records." -Wall Street Journal, February 19, 2021

SIGN UP TO READ ABOUT THE ISSUES IMPACTING NEW YORKERS.