News Column

Carriers, Rates Set for N.Y. Health Exchange

July 18, 2013

State officials have approved insurance carriers and the rates they will charge consumers through the New York Health Benefit Exchange, an online marketplace the state is creating to meet requirements of the federal Affordable Care Act, or Obamacare.

Statewide, individuals who buy insurance will save an average of 53 percent over rates offered through current plans in what is called the direct-pay market, according to the governor's office. The exchange is slated to begin operating Oct. 1, offering insurance that goes into effect in 2014.

An insurance industry representative, however, said the state's estimated rate reduction is exaggerated because it compares exchange options to only the priciest plans now in place.

Under the Affordable Care Act, all individuals must purchase health insurance or pay a fine. A key goal is to cut insurance costs by requiring healthier people to carry coverage. Theoretically, that spreads medical expenses across a broader pool of people who buy insurance.

State officials estimate 615,000 individuals will enroll in new plans offered through the exchange, though most New Yorkers will continue to get health insurance through their employers.

Eight insurance companies have been approved to sell individual plans in the Albany market through the exchange. They will offer insurance according to a tier system that categorizes them by amount of coverage, from least to most, as catastrophic, bronze, silver, gold and platinum. The plans must all offer a mandated set of "essential health benefits" that includes emergency services, hospitalization, maternity care and mental health services, among others. Insurance shoppers will be able to compare insurers' doctor networks and quality rankings.

While the coverage is the same, the lower-tier plans leave the consumer to pay more for the cost of care, through higher deductibles or co-payments.

In the Albany area, the least expensive plan that will be offered to single adults is catastrophic coverage through MVP Health Plan, at $153.45 a month. The most expensive is a platinum plan offered through HealthNow New York at $737.81 a month.

Currently, an Albany resident with a direct pay plan pays an average of $1,067 a month for coverage restricted to a defined provider network and $1,353 a month for coverage that permits out-of-network doctor visits, according to the state Department of Financial Services.

By such comparisons, the new rates represent a significant reduction. But the comparison of exchange rates with direct pay rates paints an incomplete picture, says Leslie Moran, vice president of the New York Health Plan Association. About 17,000 New Yorkers have insurance through direct pay plans. Many more thousands have insurance through Healthy New York, which offers fewer benefits and state subsidies to keep premiums affordable, according to the Health Plan Association.

Both direct pay and Healthy New York programs will end with the exchange.

Small-business owners who employ fewer than 50 workers will also be able to shop and buy insurance on the exchange, and rates have been approved for their plans as well.

"It'll be a transitional year" for small businesses, said Mark Eagan, president of the Albany-Colonie Regional Chamber of Commerce.

Small-business owners will likely see a change in their insurance coverage even if they buy insurance outside the exchange because insurance carriers may standardize all their products for individuals, Eagan said. In addition, some sole proprietors buying insurance through the exchange will no longer qualify as a "small business." The individual premium rate will be higher for them, Eagan said. For instance, Capital District Physicians' Health Plan will offer a gold-tier plan for small businesses at a monthly rate of $452.37 per employee; its gold-tier plan for individuals is set at a monthly rate of $563.94.

Insurance companies approved to sell insurance for individuals in the Albany market through the exchange are American Progressive Life & Health Insurance Co. of New York, CDPHP, Empire BlueCross BlueShield, Excellus, HealthNow (the parent of Blue Shield of Northeastern New York), MVP Health Plan, Fidelis Care and the newly created Freelancers CO-OP (for Consumer Operated and Oriented Plan).

The insurers must accept rates approved by the state Department of Financial Services before their participation is final, said agency spokesman Matthew Anderson. The companies submitted applications with requested rates, but those are not always the rates approved.

Albany-based CDPHP said the state rates are in line with expectations.

"The rates approved by the state are very close to what we were expecting, and will help CDPHP maintain competitive pricing," said Bob Hinckley, CDPHP's chief strategy officer.

chughes@timesunion.com, 518-454-5417

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