Earlier today, the long-awaited NYS Dept of Financial Services approved 2024 health insurance rate requests. And it was worth it with small groups stabilized. Small group rates increased by 7.4% and 12.4% for individuals.
As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers. Despite only 3 months of mature claims data experience for 2023 health insurers’ original requests were noticeably above the average of 22%/individuals and 15.3% for small groups.
State Department of Financial Services officials asserted the rising cost of medical care — including in-patient hospital stays and rapid increases in drug prices — continued to be the main driver of health insurance premium increases. The final approved rates for 2024 would keep health insurers’ profit provisions at 1%, state officials added, noting they sought to limit those returns in light of ongoing inflationary pressures harming consumers. That said, in anticipation of spikes in claims submissions + overall inflation, a larger-than-average increase is needed. This is in addition to increases in pricing by hospitals, consolidated IPA groups, and pharmaceuticals.
The state noted that the premiums increase main drivers are medications. “Rising medical costs and inflation continue to put upward pressure on premiums,” said Superintendent Harris. “With our rate actions announced today, we continue to prioritize the financial well-being of consumers while ensuring that New Yorkers have access to a robust, stable health insurance market.” Also, DFS, recognizing the continued uncertainty of the pandemic’s effect on consumers’ healthcare costs and the economy, held insurers’ profit provisions to a low 1%.
Oxford/Unitedhealthcare, notably, got only a 4.7% rate increase approval for next year. This is a sharp reduction from the original 15.5% request in part to disagreed anticipated costs, held reserves, overall market pricing, and reinsurance gained from ACA’s Risk Corridor. See more info here, https://medicalsolutionscorp.com/risk-adjustment-reinsurance-and-risk-corridors/.
Small Group Market
Almost 800,000 New Yorkers are enrolled in small group plans, which cover employers with up to 100 employees. Insurers requested an average rate increase of 15.3% in the small group market, which DFS cut by 52% to 7.4% for 2024, saving small businesses $607 million. A number of small businesses also will be eligible for tax credits that may lower those premium costs even further, such as the Small Business Health Care Tax Credit.
DFS SMALL GROUP MARKET RATE ACTIONS
*Indicates the Company will offer products on the NY State of Health Marketplace in 2024.
PEO Alternatives to Small Group
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Learn how a PEO can make a difference for your group. For more information on how Employer-Sponsored Insurance and a PEO can make a difference for your small business please contact us at [email protected] or 855-667-4621.