New 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.
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