Medical Costs, Prescription Drugs, Push Double Digit Increases in New York Health Insurance Premiums

Over the past two years, health insurance rates for individual, Medigap and small business policies in New York have "skyrocketed by double digits," the New York Post reports. According to figures released by the state Insurance Department and made public by the state Assembly Insurance Committee, 55 of the state's 60 insurers raised premiums by 10% or more last year. And this year, 47% of the firms that offer individual policies increased rates "at least 30%" (Lovett, New York Post, 6/7). Overall, 25% of not-for-profit insurers and 35% of commercial insurers increased small group rates by more than 40%. Committee chair Pete Grannis (D) said that increasing prescription drug costs and "more expensive" medical procedures have prompted rising insurance rates (Gallagher, Binghamton Press & Sun-Bulletin, 6/7).

Possible Solutions
In response to the increasing insurance rates, Grannis has proposed renewing a law governing insurance premiums that expired in 1999. Under the law, the state Insurance Department required insurers to seek state approval for any premium increase over 9.9%. Grannis said, "We are facing a health care crisis in New York. Premiums are going through the roof, and we're doing very little to mitigate the impact on consumers" (New York Post, 6/7). He added that the law allowed "more control" over price increases. However, while the state Assembly has voted twice to reinstate the law, the GOP-controlled state Senate has not "taken up" the measure for consideration. Commenting on the law, state Senate spokesperson John McArdle said that the Senate hopes to find "a more comprehensive approach" to control rates (Binghamton Press & Sun-Bulletin, 6/7). The Insurance Department is also "concerned" about the rates, but warned that "artificially suppressing rates" through reinstatement of premium regulation could lead "back to the days of insolvent HMOs" (New York Post, 6/7).