New York Already Had The Most Expensive Health Insurance — Now Obamacare’s Forcing Costs Back Up
Insurers on New York’s Obamacare exchange are drastically upping health insurance premiums, making the cost problem even worse for what was the most highly-regulated insurance market in the country before the health care law.
Obamacare exchange customers will face rate hikes from 12 percent to 28 percent, according to insurer filings. While all states that have released 2015 Obamacare rate requests so far are facing some premium increases, New Yorkers are getting pinched even more — the state has had the highest individual market premiums in the country for twenty years.
The solid blue state had heavy-handed insurance regulations in practice long before the health care law went into action. In 1993, New York passed a health reform law in an attempt to provide universal coverage, which ended up making New York the most expensive state in the country to purchase health insurance.
The 1993 law required insurance plans to accept all applicants, pre-existing conditions or not; it required insurers to charge all customers the same price, regardless of age or health. In 2009, before Obamacare was passed, New York’s uninsured rate was 14 percent; the national rate was 15 percent — no wonder, when private individual health insurance cost $9,036 per year on average.
The oppressive existing regulations made New York one of the few state where the average individual market insurance premium actually fell in 2014: Forbes reported in November that New York was the biggest Obamacare winner with premium reductions of 40 percent on average.
The individual mandate, for one, played a large role in sinking New York’s average premiums last year. The requirement for everyone to carry health insurance meant that New York insurers would have no longer have to price health plans to account for those who only purchased insurance once they realized they were facing a costly illness.
But now that insurers have faced one full Obamacare enrollment period and six months of active coverage, they’re back to hiking premiums.
The average requested rate increase was 13 percent, but as in the case nationally, the largest insurers are raising their premiums the most. Health Republic Insurance of New York, the largest company at 68,000 customers, has requested a 15 percent increase; MVP Health Plan, with 33,000 customers, is asking for a 19 percent increase; and Excellus Health Plan, with 24,000 customers, would like a 19.7 rate hike.
Metro Plus, a new health plan, is hiking one of its plan’s premiums by 28 percent, with an average increase of 18.5 percent across all its plans.
New Yorkers may have benefited from Obamacare at first — but they were only able to because state regulations had already ruined its insurance market. But after last year’s initial restructuring, New York will be subject to the same cost hikes the health care law is prompting in the rest of the country.