Gov. Cuomo is claiming that insurance products offered through New York Health Benefits Exchange will be 53% less on average than current individual rates. We wondered how insurance premiums could be cut in half (on average) when medical costs continue to rise. True, the individual mandate enables insurers to trim premiums, because the risk can be spread over more policyholders – including healthy individuals, who typically didn’t buy insurance before. But there had to be more to the story...
There is. We spoke to Chris Jardin, president and director of marketing for small group market at Maxon Administrators and James Schutzer, vice president of J.D. Moschitto & Associates to get the inside scoop. Both will speak at our Lunch and Learn: What Business Needs to Know About Healthcare Reform NOW!
on Thursday, September 19. (Register here) Meanwhile, here's what the state and the media are not telling you:
• Insurers are able to cut premiums on plans sold through the exchange by sharply reducing payments to providers. Naturally, not all providers are willing to cut their fees and they won’t be included in the network. So exchange plans will have “skinny networks” with fewer providers. “The state is saying the plans will have ‘robust’ provider networks, but that just means there are an adequate number of providers to serve each Zip Code,” Schutzer explains. “You may learn that your doctors aren’t covered.”
• In Westchester, an individual purchasing insurance today can expect to pay at least $1,400 a month for HMO coverage, or $2,200 for POS coverage. Exchange rates for the highest tier of coverage – platinum – will cost about $710 in the mid-Hudson region. “There’s such a rate discrepancy that they must be giving up benefits,” says Jardin.
In the press release
announcing the 2014 New York health insurance rates, Benjamin M. Lawsky, Superintendent of Financial Services, is quoted as saying, “…where New York previously had a dizzying array of thousands upon thousands of plans, small businesses will now be able to truly comparison shop for the best prices.” Unfortunately, we’re still feeling a sense of vertigo. Pass the Dramamine, please.