Ever closer to a health insurance crisis

Back in May, ARCC President/CEO Todd Shimkus testified before the Assembly's health care committee in support of legislation to allow the NYS Insurance Superintendent to review, approve, modify or deny health insurance rates as submitted by insurance carriers. At the time and still today, insurers in New York must merely "file and use" whatever rates they want with little if any immediate oversight. The legislation had the support of Senator Neil Breslin, chair of the Senate Health Care Committee, the NYS Insurance Department and the Governor, plus numerous chambers and consumer advocates. It was and is opposed by the powerful insurance lobby and the legislation has not moved given Albany's dysfunction.

As he was leaving this hearing, Todd Shimkus was told by the Insurance Department and insurance industry leaders that one step they could take on their own to alleviate chamber and small business concerns was to commit to the early release of rates. The Chambers had complained vehemently that they were getting next year's rates later and later every year. The late-arrival of rates means that members and their employees have little time to review options or to make changes to their converage in order to minimize skyrocketing premiums. While no written commitment was made, everyone suggested that rates could be provided no later than November 1st.

Some insurers in New York State have met this commitment. According to chambers outside of the Capital District, Excellus and United Health Care rates are out. While its great they are out, the trends indicate a looming crisis. One is raising premiums for small businesses 12 to 13% and the other is raising rates 24 to 27%. At the ARCC, we have been provided with Medicare Advantage rates for those members over 65. One plan is increasing these rates 43% and the other 27%. Yikes!!!

The problem is that we don't have 2010 small business and sole proprietor rates yet in spite of the verbal commitments in May. Currently, the ARCC collects nearly $2 million in premiums from participating small business and sole proprietors a year which is then paid to our three insurance providers. A 10% increase in rates will mean that these 150 companies and 400 working families will need to come up with $200,000 more in 2010 than in 2009. A 20% increase in rates will mean an extra $400,000 in premiums. That will create a crisis locally.

But who really knows what the rates will be. We don't have our small business rates as of November 4th. In spite of numerous calls to the carriers, the earliest we may see rates is November 13th but we all know what happened to their May verbal commitments. This whole situation screams out for simple reform in New York by itself - - require the insurers to file rates earlier, to provide 60 day notice of rate increases, and to allow the Insurance Superintendent to review those rates before they can be used.