ALBANY -- Gov. Andrew Cuomo on Monday ordered state regulators to reject attempts by New York health insurers to raise rates by an average of 24 percent in next year in part because of higher-than-expected costs associated with changes to Obamacare.
Cuomo said health insurers will not be able to factor in the cost of potentially losing the individual mandate provision of the Affordable Care Act adopted under President Barack Obama in 2010.
New York has more than 4 million people on its state-run health exchange, called NY State of Health. That's about 20 percent of the state's population.
"If we allow that rate increase to go through, it would be hundreds of millions of dollars as a bonanza to the insurance companies," Cuomo, a Democrat, said at an event in Manhattan.
"It would increase the cost to normal, hard-working families. We’re not going to let it happen."
What's happening?
The individual mandate required people — particularly healthy, young people — to buy insurance, aiming to lower the cost to all consumers.
But President Donald Trump and the Republican-controlled Congress repealed the measure last December, calling it costly and ineffective.
As a result, the state's 14 private health insurers in June asked the state Department of Financial Services to allow them to raise rates on average by 24 percent in 2019.
The state agency said insurers attributed about half the increase to the loss of the individual mandate.
But the Department of Financial Services decides the rates for insurers each year, and it typically cuts the rate increases they seek each year.
So in this case, Cuomo's order would drop the increases down to about 12 percent.
The majority of enrollees on the state's exchange are on Medicaid, the government health-insurance program for the poor and disabled.
Cuomo said that if the insurers' request was approved, it could lead to average increase for each policy of about $1,500 a year.
Rates increases planned
In the current year, insurers got an average increase of about 15 percent for individuals. They initially sought a 17 percent increase.
For small-group plans in 2019, insurers were requesting a 7.5 percent increase.
For individual plans, the largest increase being sought was 39 percent by Fidelis, which serves 1.7 million members.
EmblemHealth, which largely serves the New York City area, asked for a 32 percent increase.
Excellus, based in Rochester, proposed a 9 percent increase.
The state will decide the rates later this summer.
Reaction and politics
The state Health Plan Association, which represents insurers, said companies were judicious when they put in their rate requests.
“Plans’ estimates for the loss of the individual mandate were moderate," said Eric Linzer, the group's CEO.
“A key priority must be maintaining a stable marketplace in New York. Politicizing the 2019 rate requests will not help in this effort.”
Cuomo is seeking a third term and is facing a Democratic primary Sept. 13 against actress Cynthia Nixon, who has supported a single-payer health system in New York.
Instead, Cuomo said Monday the current system in New York has cut the number of uninsured New Yorkers to 5 percent and lowered premiums by 50 percent.
"Trump is trying to collapse the ACA; he's trying to wreak havoc on our health care system," said Cuomo, a potential 2020 presidential candidate.
"That's not going to happen. It's not going to happen in the state of New York."
