State insurance regulators on Friday approved rate hikes for two more health insurers — including Buffalo-based Health- Now New York — but sharply reduced what the carriers had originally requested.
HealthNow, parent of Blue- Cross BlueShield of Western New York, will be able to raise its rates between 1.6 percent and 19.8 percent. That’s down from its request of a maximum increase of 28.6 percent.
Across the entire company, the weighted average rate increase is 11.68 percent, with most members seeing increases ranging from 10 percent to 15 percent, said Lou Felice, chief of the New York state Insurance Department’s Health Bureau.
Specifically, the carrier sought an average increase of 12.7 percent for its HMO plans, including a range of 3.9 percent to 12.3 percent for large groups with more than 50 employees and a range of 18.1 percent to 28.6 percent for small groups. The small group increase was cut to a maximum of 19.8 percent by regulators. About 60 percent of its members are in HMOs.
For indemnity plans, the average was 9.87 percent, ranging from 3 percent to 12.9 percent.
Its Aqua plan — a high-deductible health plan — will go up between 7.9 percent to 9 per-cent, while a limited-network point-of-sale plan will go up by 5.1 percent to 8.7 percent.
Across the board, no member will get more than a 19.8 percent increase, and regulators demanded HealthNow cut rates in other areas to stick to an overall company average of 12
percent, Felice said.
“We thought that the rates were justified as submitted. However, we understand the state’s position and we’re all for driving affordable products into the marketplace,” said Stephen T. Swift, HealthNow’s chief financial officer. “We’re comfortable that this is the appropriate thing to do, and we respect the state’s position on this.”
The requested rate increases, as well as the reductions, were generally higher in the Albany area, where Health-Now operates as Blue Shield of Northeastern New York, than in Buffalo. The approvals do not include separate smaller increases to cover provisions of the federal health care reform that took effect in September.
The rates take effect in January.
“We very carefully reviewed the increases insurance companies wanted to impose and cut wherever we could to reduce the burden on consumers,” said Troy Oechsner, deputy superintendent for health. “We are not happy about any increases in these difficult times, and we lowered increases as much as we prudently could.”
New York insurance regulators are exercising their newly restored authority, known as “prior approval,” to review health insurance rates before they go into effect. That power, which was taken away over several years in the late-1990s, was reinstated Oct. 1 after 10 years of a “file-and-use” system, in which insurers submitted rates, but could immediately use them.
The state completed its first round of rate decisions a week ago, covering most of the state’s insurers, including Independent Health Association and Univera Healthcare. The other carrier whose rates were released Friday was MVP Health Care of Schenectady, which is bringing its commercial and Medicare plans to Buffalo.
MVP’s approved increases range from 0 percent to 24 percent. The insurer wanted hikes up to 46.1 percent on small group plans, and sought increases of more than 20 percent for 83 percent of its subscribers, saying its plan had been “severely underpriced,” Oechsner said. Regulators cut that but 35 percent of members will still see hikes over 20 percent.
“We had to balance reducing the requested increases against the need to ensure companies remain solvent,” Oechsner said.
He said the state was concerned that MVP would be too weak. MVP is on track to lose more than $54 million this year, putting it $50 million short in its required reserves.
“That can’t continue if the company is to remain a viable competitor,” he said.
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