Consumers in New York, small businesses, are facing double-digit increases in health insurance

Syracuse, New York – Luigi “Lou” Sposito says his small metal business in Cayuga County will have less money to raise employees’ salaries next year if his health insurance jumps by 18%.

Sosito, one of the owners of Stonewell Bodies in Genoa, recently learned that his company’s insurance costs could rise as much in 2023 if the state approves a request to raise interest rates on Excellus BlueCross BlueShield.

The company and its 28 employees share the cost of health insurance 50-50. The increase in premiums inevitably forces some employees to switch to cheaper, less generous plans with higher deductions that require them to pay more money out of pocket for health care, he said.

“We want to be good employers,” Sposito said. “But that kind of thing just rips the wind out of your sails.”

Insurers in New York are looking to raise interest rates for 2023 for two types of customers.

They want a rate increase of up to 46% for small group plans covering companies with 100 employees or less, such as Sposito’s business. They also want increases of up to 35% for consumers who are not part of groups and buy individual plans.

More than 1.1 million New Yorkers are enrolled in small group and individual plans.

The proposed rate increases do not affect large employers, many of which are self-financing, which means that they pay medical claims to employees.

The marches are not a done deal. People and companies affected by the proposals have until August to express their concerns.

The average proposed increase in the whole country for individual plans is 18.7%, while the average proposed increase in tariffs for small group plans is 16.5%.

The big proposed tariff increases come at a time when consumers are already struggling with rising prices for petrol, food and other items. The same pressure is affecting insurance companies, forcing them to raise rates to pay for more expensive drugs and treatments, insurers say.

Excellus, the largest insurer in Central New York, is looking for increases of 6.3% to 18.1% for its small group plans.

Excellus is also seeking an increase in interest rates ranging from 8.3% to 20.1% for its various individual plans. MVP Health Plan wants increases ranging from 14.2% to 33.8% for its individual plans. Fidelis is looking to raise interest rates to 34% for individual plans.

These changes affect New Yorkers who are listed on the U.S. Health Insurance Exchange, part of Obamacare.

The monthly price of the standard platinum plan of Excellus for individuals traded on the US stock exchange will increase from about 1059 dollars to 1210 dollars, which is an increase of over 14%. Platinum plans have the highest monthly premiums, the most generous coverage and the lowest out-of-pocket costs.

About 181,000 people in New York State, or 12% of Excellus members, are enrolled in individual or small group plans.

The State Department of Financial Services may approve, reject or reduce the increases. This has significantly reduced the average rate of interest rate increase over each of the last four years. The agency is expected to announce its decision in August.

The approved interest rate increases will take effect on January 1.

Members of the public can share their views with government regulators on the proposed increases by sending comments online.

Double-digit increases would put employers and employees at a time when they are under inflation, said Daniel Goetzmann of Goetzmann & Associates, a health insurance broker in Syracuse.

He hopes state regulators will reduce the size of the increases to a single-digit range.

Excellus says in documents filed in the state that the increases are necessary as healthcare costs, especially prescription drugs, rise.

Each year, the FDA approves very expensive new special drugs to treat both rare and common diseases.

“Special drugs are used by approximately 2 percent of our members, but they account for more than 46% of total drug costs,” said Excellus.

These expensive drugs include heavily advertised drugs on television such as Humira for arthritis and Ozempic and Trulicity for diabetes.

Healthcare use declined at the start of the pandemic, but has since been revived, according to the New York Health Plan Association, an insurance trade group.

The group said some consumers in New York could also see a rise in health insurance spending if Congress did not extend a temporary increase in tax credits. These tax credits helped reduce premiums during the pandemic for New Yorkers who buy insurance on the state’s health insurance exchange.

More than 138,000 New Yorkers have benefited from increased tax credits allowed under the federal U.S. Rescue Plan Act. When these tax credits expire, premiums could increase by 58% for consumers eligible for a tax credit, according to government data.

Sposito said the large increase in health insurance would leave his company with less money to reinvest in its business and increase the salaries of its workers.

“It’s like that leaking faucet you just can’t fix,” he said.

James T. Mulder covers healthcare and higher education. Do you have any news advice? Contact him at (315) 470-2245 or [email protected]

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