Small Business Benefit Solutions Blog

Six health insurance companies have agreed to end the secrecy over their requests for rate increases, according to the superintendent of New York’s new Department of Financial Services.

According to Benjamin M. Lawsky, of the newly formed DFS, United HealthGroup announced their agreement to transparency in their financials with the Department of Financial Services last week, while five other carriers including Aetna Health, EmblemHealth (also operating as GHI and HIP), Empire HealthChoice (known in NY as Empire Blue Cross and Blue Shield), Excellus Health Plan and HealthNow, agreed two days later. The companies represent about 85% of the prior-approval segment of the state’s insurance market, covering 2.4 million New York residents.

The health insurance carriers that continue to object to transparency are Capital District Physicians’ Health Plan, Connecticut General Life Insurance Co., Independent Health and MVP Health Care.

Now, when a carrier asks for price increases, all parts of their applications, including required information and exhibits, will be made available to the public.  At least that will be true for the carriers who have agreed to share this information. Only contractual matters that involve payments to providers and hospitals will be excluded as both sides agreed that it would not be valuable for consumers who would choose to file objections to carrier rate requests.

“This is a great day for transparency and the public’s right to know how their health insurance premiums are set,” Lawsky said in a statement. “Transparency will promote competition and allow the public to make effective comments as part of the rate review process. I applaud these companies for their decision and hope the remainder of the industry will soon see the light.”

For contracts that start on or after Jan. 1, 2012, health insurers requested weighted average increases of 12.7% and the Department granted increases of only 8.2% below the expected increase in medical costs. The lower increase will save consumers more than $400 million in 2012, officials said.

However, some carriers have responded by withdrawing plans they think aren’t going to earn enough money which may mean fewer choices, especially for small businesses in the Metro NY City area.

Elisabeth Benjamin, Vice President of Health Initiatives at the Community Service Society and co-founder of Health Care For All New York, said, “It’s gratifying to see the domino effect actually playing out in favor of New York’s consumers and small businesses. The past decade’s secret system of hidden rate filings is a thing of the past-now New York’s consumers and small businesses finally have the opportunity to understand why insurance costs are so steep, and as a result, now will be able make well informed decisions about which carrier they trust to provide their coverage.”

If you’ve received a rate increase from your health insurance carrier and want to explore options with that carrier or with other carriers that may be available to you, Small Business Benefit Solutions, LLC can shop around for you at no cost or obligation.  Be informed! If nothing else, you will be able to confirm that the plan you have is the right plan for your company.