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The Real Deal: Health Insurance Rates Going Up
ALBANY -- Get ready to pay higher premiums for your health insurance in 2015. Insurers in New York have submitted rate proposals to the Department of Financial Services for approval and on average, the 40 companies doing business in the state are looking to raise rates by about 13%.
"The increase is likely going to be higher than last year but lower than the prior 3 to 4 years for sure," says Paul Macielak, the President of the Health Plan Association of New York which represents insurers. The reasons behind the likely hike boil down to rising hospital costs, an increase in sick patients and rising drugs costs. "There's been a lot of news about a new drug for Hepatitis C, it's $1,000 a pill, it costs $84,000 to treat one individual with Hep C," Macielak says and those costs get spread among everyone in the plan.
There are a few other reasons why premiums are high that have nothing to do with the insurance companies themselves. New Yorkers already pay 22% above the national average per capita when it comes to healthcare spending, "one of the factors that goes into that is we have to charge a lot more in terms of state taxes," Macielak says adding that about 5-6% of the proposed 2015 increases are likely the result of federal mandates as well.
It doesn't seem to matter whether you have private insurance or you're enrolled in a healthcare exchange through the affordable healthcare act, chances are, you're going to pay more. "When they set up the exchanges, insurers had to come up with approved rates and the state had to approve them without having a good sense of what kind of people were going to buy insurance and what their health needs were going to be," Macielak says and now that the insurers have something to go on, the numbers need to be adjusted.
"It's really one of the great misnomers, the affordable care act was implemented to increase access and coverage of Americans and that certainly was the case in New York, it was a huge success but in terms of affordable, that's still unknown," according to Macielak and likely will be at least for the next few years until there is a clear idea of how many people will sign up and remain in the exchanges.