In Response to the New York Times Article Referencing a 50% Decrease in Premiums for New Yorkers

We have been getting numerous emails with this article being referenced by our clients along with excitement that when they wake up on January 1st, 2014 that their insurance bills will now be cut in half.  I would like to draw your attention to a few items in this article and give you a bit of a reality check.

Point 1:  “ Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under the federal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.”  The first thing that Groups need to look at is the first word….”Individuals”, this is not talking about Group Insurance, this is talking about the Individual Market in New York State that has been extremely expensive in the past.  For example, one carrier that currently has an Individual Plan, the rates are coming in around $2000 per month for an Individual.  Even with a 50% reduction, that is a $1000 premium for an Individual, which is still well over the average rate under Group Coverage in the State of New York.

Point 2:  “Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly .”  I believe that this is very misleading, this is giving you the lowest price that is going to be in the Exchange aka Marketplace without a Subsidy (tax credit for being under 400% of the Federal Poverty Level).  This price references what is being called “Young Invincible” Plan meaning, that to get this plan, you must be under 30 years old and you are looking at having more of a catastrophic plan which would cover Preventative Care and then you would have a minimum of a $6000 Deductible before anything else would be covered.  Currently, New York does not offer any plans with this type of watered down coverage.

Point 3:  “With federal subsidies, the cost will be even lower. (than $308 monthly)”.  This will be ONLY if you as an Individual qualify for a Subsidy.  This means that as a single person, to get ANY type of price break in the Exchange / Marketplace you must make under 400% of the Federal Poverty Level, which translates into making under $45,960 annually.  If you do not make under that, then the plans you can get in the Exchange / Marketplace are going to be the exact same costs that you can get outside the Exchange / Marketplace

Things we are excited about in this article:

1.  That for Individuals that have struggled with the high cost of health insurance will get to see some relief.

2.  Department of Financial Services say they have approved 17 insurers to sell individual coverage through the New York exchange, including eight that are just entering the state’s commercial market.  Currently there are only a handful, so more choices will be better for everyone!  Keep in mind some of these may just be Medicare networks that only the lower income individuals will qualify to be a part of.

What else to keep in mind:

1.  Be looking for “Borough-centric” plans, meaning that carriers are going to come out with plans that limit the network dramatically in order to get the cost down.  A great example of this has been with Aetna’s NYC Community Plan, these plans have typically been under $400 a month in premium but they are an HMO plan where you must get a referral and they only have doctors in the 5 Boroughs.  The smaller NYC Community Network they are utilizing is about 40% of the size of the normal Aetna Network.  So be looking for these type of plans to be coming out In and Out of the Exchange / Marketplace.

2.  Brokers will be allowed to sell inside and outside of the exchange and there will be no difference in cost.  Be weary of signing up through a Navigator because as it stands right now, they are going to be glorified Enrollers that since they are not licensed, they cannot advise on Insurance, they can only present to you the plans and have you draw your own conclusions.  Also, 6 months down the road if you have a question about the benefits you bought or you are having a claims issue, you cannot go back to the Navigator, you’ll be dealing with the carrier directly and not have someone as your advocate as you would if you had got your plan through a Licensed Broker that is more qualified to help assist you with your needs.

3.  Be on the look out as groups to be getting hit with more taxes on your group plans, this is going to help to pay for the cost reduction for the Individual Plans.