Premiums are rising for small group and individual health insurance statewide and in Western New York — but not by as much as insurers had requested.
The state Department of Financial Services announced Wednesday that it has approved health insurer premium rate increases for 2023, with some adjustments. The state has reduced insurers’ asking rates by 48% in the individual market and 52% for small groups, collectively saving the more than 1.1 million New Yorkers enrolled in these plans a total of nearly 800 million dollars, the department estimated.
Here’s how it’s done in Western New York:
- The entity that includes Western New York’s Highmark Blue Cross Blue Shield had asked for a 20.5% increase for individuals — 6,457 people enrolled in those plans — but the state agreed to a 12.8 increase % in place. For small group plans, which cover employers with up to 100 workers, Highmark had requested a 15.3% increase, with the state approving a 10.7% increase. Highmark has 74,726 members in its small group plan.
- Meanwhile, Independent Health asked for a 10.2% increase for individuals — 7,641 enrollees — and the state agreed to a 6.1% increase. Of the smaller groups, of which Independent Health lists 26,217 members, the insurer requested a 15.9% increase, but the state approved a 12.9% jump.
- Excellus Health Plan, which includes Univera Healthcare, had requested a 14% increase for individuals – 26,562 enrollees – and the state agreed to a 10% increase. For small group plans, for which Excellus listed 154,316 members, the insurer wanted a 12.9% increase, but the state approved a 9.4% increase.
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The rate adjustments affect people who purchase individual commercial health insurance and small employers with 100 full-time workers or fewer, together comprising a small slice of membership for the big three local insurers. The rate increases, which do not affect large employers with more than 100 workers, highlight how rising medical costs and inflation are putting upward pressure on premiums.
On Tuesday, two of Western New York’s largest health plans released their 2021 financial results: Highmark Western and Northeastern New York reported a loss of $58 million, while the plan healthcare which includes Univera Healthcare reported approximately $118 million in revenue.
The state said Wednesday that hospital stays and drug costs continued to be the main driver of rising premium rates and also noted that medical claims have increased as New Yorkers were catching up on medical care delayed by the pandemic.
The New York Health Plan Association, which represents 29 health plans, said the rate requests submitted in May were “reasonable and appropriate.”
“Unfortunately, the final approved rates do not fully take into account the factors that drive underlying health care costs,” association president Eric Linzer said.
Highmark of West and Northeast New York, which changed its name from HealthNow New York in 2021 after ending its affiliation with Pittsburgh-based Highmark Inc., reported a loss of $58 million on revenue of $3.1 billion last year – its first loss in six years. The insurer has been grappling with rising costs from Covid-19, pent-up demand for elective surgeries and heavy IT spending from its affiliation with Highmark.
Highmark spokesman Kyle Rogers noted that final 2023 rates for individual and small group plans — about 10% of the insurer’s membership — reflect rising medical costs and added that the plan will health works with regulators to target the underlying factors of health insurance premiums.
Independent Health – which also posted a deficit last year, its first since 2015 – said that after a three-year series of near-lump sum rate adjustments, approved premium increases are in line with national and industry trends. The rate adjustments affect 12.3% of Independent Health members.
Combining the two years of financial performance amid the pandemic, Independent Health nearly broke even, running a deficit of just $6.5 million.
“Our pricing adjustments for 2023 reflect the current economic environment, near-record inflation and the unprecedented impact the Covid-19 pandemic has had on area hospitals, other segments of the health care delivery system. health and health plans,” said Rich Argentieri, Director of Sales and Marketing, Independent Health.
While premiums will rise, he noted the insurer was able to keep most copayments and deductibles at current levels and increase benefits for preventative prescriptions for most of its plans.