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New Yorkers to Expect 12.4% Price Hike in Health Insurance Plans in 2024

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By:  Hadassa Kalatizadeh

New Yorkers should brace themselves for more insurance premium hikes.

As reported by Crain’s NY, New York’s Department of Financial Services approved an average 12.4 percent hike for insurance companies’ individual plans and 7.4 percent for small-group plans in 2024, the agency announced Thursday.  Despite the rate hikes, things aren’t as bad as they could have been, as the insurance companies had requested much higher hikes when they submitted their plans in May.  The rate increase for individual insurance plans is about 44 percent lower than the insurers’ requests. The department said its negotiation efforts will save $126 million for the 248,000 New Yorkers insured under individual health plans.  It said it reduced the proposed rates for small-group plans by about 50 percent, which will save small businesses $607 million next year. Roughly 800,000 New Yorkers are covered under small business plans, which apply to businesses with less than 100 employees.

The approved rate hikes for 2024 are in line with the increases seen in 2023, both indicative of rising costs of insurance claims for health insurers. Last year, rates went up by 9.7% for individual plans and 7.9% for small-group plans.  “The medical costs associated with those claims have continued to rise, which in turn has resulted in higher premiums,” said Ciara Marangas, a spokesperson for the Department of Financial Services. Before that though, since the Covid-19 pandemic, individual rates saw record-low rate increases.

“The rates truly do reflect the underlying costs of health care,” said Leslie Moran, senior vice president of the New York Health Plan Association, which represents 28 insurance providers in New York state. “When a plan’s requests are reduced, it could lead to shortfalls in the future.”  Eric Linzer, president and CEO of the association, said in a statement that the higher rates proposed by insurers in May reflect the rising costs of health care.  “New York’s health care costs are among the highest in the country,” Linzer said, noting higher rates charged by hospitals and physicians, and double-digit growth in the price of prescription drugs and government taxes on health insurers.  “Given these factors, greater focus is needed to rein in the escalating costs hospitals, providers and drug companies are charging to provide relief for consumers and employers,” Linzer said.

Of the insurance providers in the state, IHBC, a subsidiary of the Independent Health Association, got approved for the highest premium hike — 25.3 percent for individual plans. Per Crain’s, the provider had requested a 39 percent increase in May.  Emblem Health, which covers 3 million New Yorkers, was also approved for a 25.1 percent rate increase for individual plans. The provider had proposed a 52.7 percent increase.

Of course, rates will be lower for individuals who qualify for federal tax credits. Per Crain’s, the agency said that last year, over 60 percent of New Yorkers who enrolled in an individual plan through the New York State of Health qualified for tax credits which lowered their monthly premium costs. Also, members of New York’s Essential Plan did not need to worry about rate hikes.  The low-cost public insurance option doesn’t charge premiums for New Yorkers who qualify. The Essential Plan currently accepts individuals with income up to 200% of the federal poverty threshold.  This year, local officials submitted a waiver to the federal government to expand eligibility also to New Yorkers with incomes up to 250% of the poverty line.

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