New York-based insurers must now ask for permission to raise rates on small group and direct pay plans. State accountants then will determine whether the hike is really needed and reasonable, according to WSYR.
Permission is required under the state's new prior approval law, which went into effect on Oct. 1. The law grants the New York Insurance Department the power to review and adjust health insurance rates before they go into effect.
The latest health insurance rate increase requests submitted to the department were cut up to 22 percent. For example, Oxford health plans asked for a 22 percent increase on group plans, but only a 12.5 percent increase was approved. Independent Health Association asked for 16 percent on direct pay plans, but the department only granted them a 9.5 percent increase, WSYR reports.
"We had to balance reducing the requested increases against the need to ensure companies remain solvent, because protecting consumers means making sure their health insurer is able to pay their claims," said Troy Oechsner, Deputy Superintendent for Health, in a statement.
In a similar move, the Illinois Department of Insurance has outlined a new process to ensure all proposed premium increases are reported and made available to the public. The reporting process requires health insurers to submit rate changes and information justifying any rate increases beginning Dec. 1, according to the Insurance and Financial Advisor.
To learn more:
- read the WSYR article
- read the Insurance and Financial Advisor story
- see the New York Insurance Department statement