Health insurance startup Oscar is asking for premium increases as high as 30 percent in New York--a significant departure from the modest rate hike it asked for last year and another sign the Affordable Care Act exchanges are headed for a market correction, Politico New York reports.
Oscar is not alone in its double-digit rate hike request, as other insurers around the country have begun to request similarly steep premium increases for their exchange policies, in part to adjust for the fact that their initial rates were set too law--in part to attract new customers.
Oscar is seeking to hike premiums between 8 percent and 30 percent in the Empire State, citing rising healthcare costs, the end of premium-stabilizing government programs and the fact that its members require more care than it expected, according to Politico. All told, it lost $105.2 million in its New York and New Jersey business in 2015.
Last year, New York regulators approved Oscar's request for an average rate hike of just 4.54 percent. It's possible, however, that the state's Department of Financial Services will reduce Oscar's rate request for 2016. Indeed, the Obama administration has pointed out that the rates insurers request are often not at all reflective of the amount consumers end up paying.
As it endeavors to break into the difficult-to-disrupt health insurance market, Oscar has also considerably whittled down its New York plans' provider networks--a narrow-network strategy that's part of its plan to attain 1 million members in the next five years. The insurer, which touts its consumer-centric, technology-driven ethos, has already expanded to markets in Texas and California.
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