Five Ways to Rein in Health Insurance Rates

JUNE 11, 2018

Westchester residents and New Yorkers statewide should gird ourselves for new increases in private health insurance premiums.

Last year, the state’s private insurers had requested increases averaging 17 percent for individuals. In response, the state Department of Financial Services granted hikes averaging 15 percent.

This year, it got worse.

As reported in the Journal-News on June 4 (“New York health insurers seek a whopping increase for 2019”), the Empire State’s fourteen private insurers now seek an average 24-percent increase in such rates, a request collectively running 41 percent higher than last year’s proposed premiums.

State officials largely attribute the far-bigger ask to the imminent repeal of a key provision of the Affordable Care Act – commonly called Obamacare — that has helped contain insurance costs by mandating inclusion of younger and healthier people within the insurance pool.

With the state expected to decide on the request in the coming months, hefty increases again seem to be in the cards. So, what can we do to ease the coming blow?

As the county’s leading business advocacy organization, the Westchester County Association (WCA) wants to shield average consumers from excessive insurance costs. Yet we still want to make sure policymakers protect the interests of healthcare providers, who need the right level of resources to keep providing quality care.

With these goals in mind, the WCA is calling for statewide implementation of the following five measures:

First, place new limits on denials:  Bloomberg reported in May that health insurers had enjoyed their best quarter in years. And while the S&P rose 136 percent between 2010 and 2017, stock in managed care companies ascended 300 percent during that same period.

Yet both providers and patients have been walloped by a surge in denials and delays of payments for medical procedures, many previously authorized.

The WCA supports passage of proposed state legislation that would limit denials for conditions that arise concurrent with conditions authorized for treatment.

Second, boost the transparency of patients’ insurance plans:  Surprisingly, because of the lack of easy access to basic information, payments are often delayed or incorrectly denied. Moreover, as a result, the scarce resources of providers, insurers, and regulators are often wasted or squandered.

We support legislation requiring insurers to issue identification cards containing the most-basic elements needed for patients and providers to understand and access benefits.

Third, resist mandatory nurse staffing ratios: We agree with the professional nursing associations and local healthcare unions who oppose compulsory staffing ratios.

Let the medical professionals, the experts, not legislative mandates, decide the best way to care for patients. Mandating one area without understanding the total cost of care is not a formula for success and may ultimately raise the cost of care.

Fourth, institute common-sense medical malpractice reforms: Healthcare delivery in New York State suffers from a broken medical malpractice system. Our providers pay America’s most-expensive annual malpractice liability insurance premiums. And malpractice payouts in New York State reached $617.9 million in 2017, highest in the United States.

State legislators could begin the repair process by passing laws that place caps on pain and suffering liability.

Fifth, require “healthcare reinvestment” by insurers: Adopted some four decades ago, the Community Reinvestment Act has helped ensure that America’s banking industry consistently did its fair share to promote a balanced marketplace in respect to public access to credit.

Similarly, we need “Healthcare Reinvestment Act”-style legislation obliging health insurers to re-balance the marketplace. They should return a portion of their profits through a combination of premium reductions and investment in the delivery of care.

After all, the state’s hospitals are not-for-profit by law. But large, managed care companies are for-profit. They’re heavily focused on serving shareholder interests.

Legislation should require insurers to either establish a healthcare reinvestment fund or return to not-for-profit status.

A 2016 study by the Commonwealth Fund found that American families spent 10.1 percent of their income on health insurance premiums and deductibles, a 55-percent increase over a decade prior.

And levels of per-employee health insurance costs paid by large employers have outpaced inflation rates for five straight years, according to the National Business Group on Health.

Our five-part plan would help rein in ever-rising insurance costs. It would make our healthcare delivery system more efficient. We’d have greater control over insurance spending by both households and employers.

And not a moment too soon.