health-ins-300x225-9563457New York is bucking the national trend in the largest category of health insurance costs, but in exactly the wrong way.

A Commonwealth Fund study finds – contrary to widespread belief – that the growth of premiums for employer-sponsored health plans has slowed nationwide since passage of the Affordable Care Act.

Unfortunately, just the opposite has happened in the Empire State. In fact, for single-person coverage under employer plans, New York edged out Maryland for the steepest premium rise in the country.

Nationwide, the average annual premium increase for single coverage was 3.8 percent from 2010 to 2015, compared to 4.7 percent for the period from 2006 to 2010.

New York’s single-coverage premiums, by contrast, grew at a 5.4 percent rate in the five years after Obamacare, and a 3.2 percent rate in the five years before. It was one of only 17 states in which post-ACA price growth was higher than pre-ACA growth.

The study also confirmed New York’s ranking as the second-costliest state for employer-provided insurance overall–a dubious distinction examined in detail here.

The study focused on employer-provided coverage, which is the most common type of health insurance and covers roughly half of the U.S. population. Its figures did not reflect trends in the individual or “direct pay” market, covering about 6 percent of the population, aimed at people who don’t get coverage through work and don’t qualify for Medicare or Medicaid. This group was most directly affected by President Obama’s health reform law and is facing dramatic premium spikes for 2017.

For plans offered through the federally run ACA exchange, healthcare.gov, the average increase for the year ahead is 22 percent. In New York, which has its own exchange, the average increase is 16.6 percent.

New York’s outlier status in the employer-provided insurance market suggests that problems in the state’s market owe more to Albany than Washington. Among other things, the state imposes heavy taxes and coverage mandates that unnecessarily drive up the cost of coverage.

The state also regulates premiums under a “prior approval” law passed in 2010, the same year as the ACA. But those price controls do not apply to the plans offered by most large employers, and have failed to close the affordability gap for small-employer benefits.

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

The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS

As the Hochul administration presses for the creation of a "guaranty fund" to bail out failed health insurers, the state is quietly moving to seize a small company that could be the fund's first target. Read More

While pleading for money in Albany, hospitals and nursing homes spend at the bargaining table

Friday's announcement of an amended labor contract for New York City-area hospitals and nursing homes sends a contradictory message about the financial condition of the state's health-care industry. Read More

The Essential Plan’s accumulated surplus will soon break $10 billion

The accumulated surplus of the state-run Essential Plan had ballooned to $9.9 billion as of the end of December, putting it on track to break $10 billion by the close of the fiscal year on March 31, according to newly obtained records from the comptroller's office. Read More

The Hochul administration seeks more federal money for its overfunded Essential Plan

In a move that ought to raise eyebrows in Washington, the Hochul administration is requesting additional federal money for New York's Essential Plan, which is already sitting on more than $9 billion after years of running a multi-billion-dollar surplus. Read More

Hochul puts Medicaid spending on a steeper slope

Governor Hochul is releasing the brakes on Medicaid, allowing state spending on the safety-net health plan to increase more than twice as fast as it typically did during the Cuomo administration. Read More

Hochul’s agenda mostly sidesteps health care

Governor Hochul gave health care surprisingly little attention in her State of the State speech on Tuesday – a sign that taking on dysfunction in one-sixth of the state's economy ranks low on her list of priorities. Read More

Federal omnibus deal has big implications for New York Medicaid

The big spending bill heading for a vote in Washington this week would scramble the outlook for Medicaid in next year's state budget, mostly for the better. The $1.7 trillion federa Read More

Another Reason to Lift the Charter Cap

A staff shortage in upstate hospitals prompted , where hospital officials and state lawmakers asked that more funding to train medical professionals be included in January’s state bu Read More

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!