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NYS has approved 2020 health inusrance rate requests today.   Small group rates increase 7.9% and 6.8 8.6% for individuals.

As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2020 Rate Requests.  Despite only 3 months of mature claims data experience for 2019  health insurers’ original requests were noticeably below average.  Ultimately NYS reduced this request substantially by approximately 55%.

The 2020 small group rate increase was in line at 7.9% vs  2019’s approval of  7.5%. This reflect a stabilizing ACA market. Insurers’ financial performance improved nationwide last year to its highest level since the passage of the law. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% last year in the individual market nationwide. That led to plans paying $800 million in rebates for failing to meet requirements on medical spending, according to the Kaiser Family Foundation

Rate Factors

The state noted that premiums increases  main driver are medications.  “The drug costs account for the largest share of medical expenses, followed by inpatient hospital costs, and outpatient hospital costs.”

More than one million New Yorkers are enrolled in small group plans, which cover employers with 1 to 100 employees. Insurers requested an average rate increase of 12.2% in the small group market.  DFS cut the weighted average requested rate increases by 4.3 percentage points, or 35%, from 12.2% to 7.9% for 2020, saving small businesses over $313 million. The federal ACA Health Insurance Tax, which was reimposed for 2020, accounts for approximately 3% of these rates.  Without this tax, the increase would have been 4.7%. A number of small businesses will also be eligible for tax credits that may lower those premium costs even further.

Health Insurance Tax is Back

The HIT (Health Insurance Tax) is back. For Small business, this translates to an estimated 2.5%-3% added surcharge. For States like NYS where there is already approx. 16% added surcharge to high premiums, this becomes daunting.  It is no surprise the unpopular HIT was suspended. In 2017, payers escaped making $13.9 billion in payments due to the moratorium, according to a 2018 analysis by Oliver Wyman, commissioned by UnitedHealth Group.  This may have saved consumers billions on their insurance coverage.“The taxes on health insurance are non-deductible for federal tax purposes for health insurers,” the report explained. 

Website Stop The Hit calculates $5,000 as the average tax for a 10-man small business for example.Calculates how the HIT affects your State and your business, here. Take action now: tell Congress to repeal the HIT! Join small business owners across the country in stopping the HIT. Sign the petition here.

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