NY’s spiking health premiums

by Bill Hammond |  | NY Torch

The state’s employer-sponsored health insurance premiums spiked by more than 10 percent in 2017, leaving New Yorkers with the some of the highest coverage costs in the contiguous United States.

Among private-sector employers, the state’s average single-coverage premium last year rose to $7,309, second only to Alaska at $7,694, according to just-released survey data from the federal Agency for Healthcare Research and Quality.

While nationwide single premiums increased 4.3 percent, New York’s jumped 10.9 percent.

New York’s average family premium was $21,317, which rose by 10 percent and ranked third behind Alaska and Wyoming.

Source: U.S. Agency for Healthcare Research and Quality (click to enlarge)


The surge follows a lull in 2016, when employer-sponsored premiums dipped slightly and the state’s single-coverage premiums dropped to fifth-highest in the U.S.

While New York’s premiums have long been high by national standards, the affordability gap appears to getting larger. New York’s single-coverage costs were 15 percent higher than U.S. average in 2017, the greatest difference since at least 1996. The state’s No. 2 ranking for single coverage compares to 18th in 2003 and 10th in 2010.

The trend adds to evidence that aggressive price regulation by the state Department of Financial Services, under a so-called prior approval law reinstated in 2010, has not been effective in controlling costs.

Source: U.S. Agency for Healthcare Research and Quality (click to enlarge)


Among the factors driving New York’s high premiums include heavy state taxes on health insurance and an ever-growing list of state-imposed coverage mandates.

New York’s high costs are also partly explained by relatively rich benefits. Only 75 percent of New Yorkers with private-sector employer-provided coverage had a deductible, compared to a national average of 88 percent. And for those who had deductibles, the amount was relatively small: $1,687 compared to a U.S. average of $1,808.

The average employee contribution for health coverage, at 21.5 percent, was close to the national average of 22.2 percent.

The share of New Yorkers who work at private-sector firms offering health coverage is 88 percent, the fifth highest rate in the country. But the share of employees who enroll, at 53 percent, is the fifth lowest. The net result is that the share of New York’s private-sector workers with employer-provided coverage, at 46 percent, is lower than the U.S. average of 48 percent.

This may be explained by a combination of New York’s relatively high costs and the broad availability of state-sponsored coverage through Medicaid and the Essential Plan.