Policy

Some Obamacare Health Plans in New York Request Double-Digit Increases

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Whitehouse.gov

The state of New York was one of Obamacare's clearest winners: In the years prior to the enactment of the federal health law, the state had all but ruined its individual insurance market with a handful of strict regulations that caused premiums to skyrocket and enrollment in individual insurance plans to dwindle to a fraction of what was normal. So when Obamacare arrived, it helped bring individual market premiums down. 

But how long will that last? Some customers are already experiencing "sticker shock" regarding next year's rate increases, according to The New York Times

Some New Yorkers are in sticker shock after receiving notices from their insurance companies saying that they have asked for significant rate increases through the state's health exchange next year.

The exchange, which has prided itself on being affordable, is now facing requests for increases as high as 28 percent for some customers of MetroPlus, a new entry to the individual insurance market and one of the least costly — and most popular — plans on the exchange this year.

Beth Leibson, a Manhattan resident, received a letter from MetroPlus saying it was working on raising her rate by 28 percent. She said this was a higher one-year increase than any rate rise she had had with previous insurance, including insurance under the federal law known as Cobra, where she paid the entire bill. "It seems to me that this defeats the purpose of 'affordable' health insurance," Ms. Leibson said.

Over all, including plans inside or outside the exchange, insurance companies asked for average rate increases of 13 percent in 2015, the state's Financial Services Department said Wednesday. The requests cover individual and small-group plans, but not large-group plans like those offered by large companies and government employers.

These rate increases don't factor in subsidies, and it's possible that they will be reduced before going into effect. And some smaller insurers aren't asking for hikes quite as large. But according to the New York Post, the bigger health plans are asking for larger hikes. Which makes a certain sort of sense: They already have a built in customer base, and now can proceed with ratcheting up rates, while smaller competitors may be looking to draw in customers. You see a similar pattern in Maryland, where CareFirst, which has more than 90 percent of the Obamacare exchange market, is requesting increases between 23 and 30 percent, according to The Washington Post