New York state insurance regulators are telling units of big national carriers to accept big cuts in their 2017 individual health rate proposals if they want to continue to sell individual major medical coverage in the state.
The New York State Department of Financial Services announced last week that it has approved individual health rate increases averaging about 17 percent.
The carriers had asked New York’s DFS for increases averaging about 19 percent.
The department required four carriers to charge higher premiums than they had originally requested, but it demanded big cuts in increases from New York state units of Hartford, Connecticut-based Aetna, Indianapolis-based Anthem and Minnetonka, Minnesota-based UnitedHealth Group.
The department cut Aetna’s average increase to 8 percent, from a requested change of 19.4 percent.
The department cut an Anthem unit’s increase to 15.2 percent, from 25.1 percent.
One UnitedHealth unit received saw its rate increase request reduced to 11.5 percent, from 26.8 percent. Another saw its request slashed to 28 percent, from 45.6 percent.
On the small-group side, the department cut the average increased allowed to 8.3 percent, from a requested average of 12.3 percent. No rate proposal on the small-group side was changed by more than 8 percentage points. Regulators required six small-group carriers to charge more than they had originally requested.
Maria Vullo, the state’s new insurance superintendent, said the department reviewed rate requests carefully. The New York department “will continue to protect consumers and ensure access to health care, while maintaining a vibrant and competitive New York insurance market.”
Top executives at Aetna, Anthem and UnitedHealth have all told securities analysts in recent weeks that they would consider pulling out of individual health markets in states that fail to allow for what they believe to be adequate 2017 rate increases.
Aetna is “planning on being on the New York State of Health Marketplace in 2017, as we continue to engage with DFS and others to develop a competitive, sustainable market where individuals have choice and rates reflect the true cost of providing care,” a spokesman for that company said in a statement about the rate announcement.
Representatives for Anthem and UnitedHealth could not immediately be reached for comment.
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