How much more you pay for health insurance in 2017 under the federal Affordable Care Act depends greatly on where you live.
The 25 percent hike predicted Monday by the federal government was immediately pounced on by opponents of the ACA, popularly known as Obamacare, and no doubt caused some immediate consternation for those paying for their own insurance. But in New York, which runs its own health exchange, the increase will be much less than 25 percent.
The state announced the 2017 premiums for 17 insurers offering individual coverage back in early August. The statewide average increase will be 16.6 percent — far more than the rate of inflation but far less than the national average cited by the federal government.
Capital Region-based health insurers were approved for the following average 2017 rate hikes for individual health insurance premiums:
Blue Shield of Northeastern New York: 4.7 percent;
Capital District Physicians’ Health Plan: 13.9 percent;
Fidelis Care: 11.6 percent;
MVP Health Care: 6.0 percent.
New York state’s online search engine shows a wide range of options available from these four insurers for a hypothetical 50-year-old Capital Region man seeking Silver-level individual coverage for himself:
CDPHP offers six plans costing $377 to $395 per month;
Fidelis offers two costing $303 to $322;
Blue Shield of Northeastern New York offers four costing $403 to $416;
MVP offers eight costing $344 to $402.
Details of each of these plans — deductibles, co-payments, out-of-pocket limits, services covered — vary significantly. The prices above cited are for 2016 and all reflect subsidies subtracted from the full premiums, based on the man’s $40,000 annual household income.
For some insurers, individual coverage is a limited market sector.
CDPHP does not actively market its individual insurance plans, concentrating instead on group coverage, according to spokeswoman Ali Skinner. As a result, it has only about 5,000 individual insurance plan policyholders among its 420,000 subscribers.
There are a variety of factors that drive up the cost for these subscribers, she said, including the fact that they often have more numerous and more expensive health care needs.
“We know that the individual market is a group that may not have had insurance in the past,” she said.
CDPHP’s 13.9 percent rate hike is many times larger than the U.S. Department of Labor’s Consumer Price Index for the 12 months ending in September 2016. The index showed a 1.5 percent overall increase in the cost of consumer goods and services, with a 5.2 percent increase for medical care commodities and a 4.8 percent boost for medical care services.
Skinner said CDPHP’s rate hikes reflect its costs as anticipated through actuarial analysis.
“The biggest contributors for us are prescription drug costs, hospitalization costs, and utilization — people using a lot of health care,” she said.
Health insurers statewide proposed 2017 increases averaging 19.3 percent for individual health coverage but were approved for only 16.6 percent on average by the state Department of Financial Services. CDPHP was one of the few that got more than it asked for — it requested a 13.1 percent increase and was approved for 13.9 percent.
Fidelis Care, which has nearly 250,000 members and 10,000 health care providers in the Capital Region, plus a 400-person Latham regional headquarters, said it is focusing on keeping administrative costs down to control its premium costs.
“The premium increase for 2017 is based on our projections of medical claims and administrative costs, which reflect our experience in serving members over time,” said spokeswoman Allie Abbate.
Meanwhile, the bulk of health insurance is still issued through employers.
Blue Shield of Northeastern New York has 120,000 subscribers in the Capital Region and only 3,000 to 4,000 of them hold individual policies.
This has a mixed impact, said Don Ingalls, vice president of state and federal relations for the Latham-based insurer: It’s good because it means employers have not widely canceled group coverage for their employees, as some Obamacare opponents back in 2010 feared they would. It’s bad because healthy people who could sign up for individual plans and help pay the costs of Obamacare haven’t done so in the numbers proponents had hoped for.
“Insurance is the law of large numbers,” Ingalls said, and ideally a large number join the pool, with younger and/or healthy people paying more in premiums than they consume in care, counterbalancing the older and/or unhealthy people whose care costs more than their premiums.
“Nationally and in New York, the people that have enrolled have been older,” he said. “That’s been a contributor as well.”
The federal penalty for going uninsured is now 2.5 percent of household income or $695 per adult and $347.50 per child in the household, whichever is greater. For 2017, the per-person penalty will be adjusted upward for inflation.
Ingalls noted that the 25 percent average increase announced by the federal government does not apply to states like New York, which run their own health insurance marketplaces, because the state sets prices.
“The national news today doesn’t affect New Yorkers at all,” he said.
(The Affordable Care Act is implemented through mishmash of marketplaces — about a dozen states run their own marketplaces, about a dozen and a half states have federally facilitated market places, and the rest have one of several state-federal hybrids.)
Skinner at CDPHP said New York’s marketplace is a standout among all these.
“What we’re seeing is that New York already had a lot of these mandates in place before the exchange took effect,” she said. “New York was really collaborative on the process ... they brought the health plans to the table, they got input from us.”
As a result, she said, there were fewer hiccups in the implementation of the exchange, and other states are trying to catch up with what New York has accomplished.
Ingalls said the news of the Obamacare rate hike is timely in that it raises awareness of consumer options right before the Nov. 1 start of the three-month open enrollment period, during which uninsured individuals can sign up for health insurance and insured people can switch to an insurance plan that is less expensive or more closely suited to their needs. Letters will be coming in the mail to policyholders shortly advising them of this, he said, and Blue Shield of Northeastern New York offers policy review and information sessions to consumers online, by phone, or at community meetings.
The state Department of Health on Tuesday urged consumers to take this opportunity, because coverage options may change and tax credits to help pay for it also may change — every year.
“As we prepare to launch the fourth open enrollment period, our focus is helping the remainder of New York’s uninsured find low-cost health insurance coverage,” said Donna Frescatore, executive director of NY State of Health, the state’s official marketplace. “Increased help paying for coverage and expanded health plan options in 2017 will help all consumers, both current and those new to the Marketplace, find the coverage and care they need.”
Reach Gazette reporter John Cropley at 395-3104, [email protected] or @cropjohn on Twitter.