“New York stepped up and flattened the curve, but consumers are still feeling the economic effects of the pandemic. Our number one job is consumer protection and ensuring that quality, affordable health care is available to everyone in the state.”
~ New York Superintendent of Financial Services, Linda A. Lacewell
On August 13, 2020, Superintendent Lacewell announced that the New York State Department of Financial Services (DFS) is reducing health insurers’ 2021 requested rates. *Rates in the individual market will increase by only 1.8%, the lowest increase for individuals ever approved. This is an 85% reduction and will save NY consumers over $221 million.
Small group plans will only experience a 4.2% rate increase; the second lowest ever approved by DFS. This is a 63% reduction, saving small businesses more than $565 million. Over 1.2 million New Yorkers are enrolled in individual and small group plans.
In addition, federal tax subsidies under the Affordable Care Act (ACA) will help mitigate increases for some individuals purchasing coverage through the New York State of Health marketplace. Approximately 60% of marketplace enrollees receive the federal Advance Premium Tax Credit (APTC). The APTC amount is on a sliding scale for enrollees with incomes up to 400% of the Federal Poverty Level (FPL), which represents approximately $51,040 for individuals and $104,800 for a family of four. The amount of the APTC is set by the second lowest cost silver plan in each county. Premiums in the individual and small group markets will also be lower in 2021 due to the repeal of the ACA health insurance tax.
The significant reduction in costs comes as health insurers report record profits for the first half of 2020. As many individuals cancelled or postponed their elective surgeries, insurers were not paying out as much as in previous years. Insurance companies also found themselves paying back excess premiums to policyholders under the ACA. In addition, health care costs continue to rise, placing pressure on insurers to offer premium rates.
As New York State evaluates the changing needs and future of healthcare in a post-COVID world, lower rates and more flexible coverage ensures that consumers and employers throughout the state will have better access to the coverage and care they need.
You can read more on the New York State DFS website via this link.
*These rate decisions do not include the Essential Plan, available only through the New York State of Health, which will still have premiums of $20 or less for lower-income New Yorkers who qualify. More than 830,000 New Yorkers were enrolled in the Essential Plan as of July 31, 2020.