Regulations
on Health Insurance Companies

… and the impact on premiums

Summary

The state of New York has regulations on insurance companies that are similar in concept to what the U.S. is considering placing on all insurance companies in all states (as of U.S. Congress activities in October 2009).

A family in Allegany County, the second poorest county in the state of New York, can buy HMO health insurance for between $35,000 per year and $57,000 per year, the latter of which is not much different than the entire median family income for a year in the U.S. There are some advantages to paying the higher amount: the health insurance plan does not ration your care quite as much as being within an HMO. However, it does not eliminate in-network and out-of-network restrictions, co-pays, deductibles and the coinsurance for major medical bills. In other words, the cost of $57,000 per year for the more expensive plan is the minimum cost involved.

February 2010 Update: the minimum rates in the above county went up and are now above $3,000 per month.

Details

The state of New York has special regulations on health insurance companies:

” … New York has addressed the problem of underinsurance by requiring, through regulation, that insurers provide adequate benefits. Also, they must accept anyone, regardless of health status (though they can enforce a waiting period to prevent individuals from waiting until they need care to apply for coverage). Innovative insurance products that keep premiums competitive by shifting significant costs to the insured are prohibited in New York.”

The associated state of New York health insurance rates are extremely high, such as for the second poorest county in the state of New York:

• Range of premiums per month for a family for Allegany County in NY
  • Family HMO plan: $2,882.76/mo - 3,615.65/mo October 2009
  • Family POS plan: $3,055.07/mo - 4,768.55/mo October 2009
  • As noted below in “Sources”, the minimum rates for a family went above $3,000 per month by February 2010.
• Range of premiums per year for a family for Allegany County in NY
  • Family HMO plan: $34,590/yr - $43,390/yr, October 2009
  • Family POS plan: $36,660/yr - $57,220/yr, October 2009

Example of Sky-Rocketing Premiums when Tough Regulations Are Applied

To give you some idea of how bad the situation is, keep in mind that some health insurance companies offered some unbelievable features or sweet deals in 2009 that seemed untrue. They tried get through the year of health reform discussions in 2009 having customers think that that health insurance companies are not so bad.

But those sweet deals did not occur everywhere in 2009. For the example of the family rates, above, the higher rate went from 4,307.63 to 4,768.55 in just 3 months between May 2009 and August 2009, an increase of $5,530 per year.

Sources

Quote about the regulations: PNHP article of April 28, 2009
http://www.pnhp.org/news/2009/april/new_york_hmopos_dea.php

New York health insurance rates for Allegany County:
— August 2009 (pdf file)
http://www.medicareforall.org/files/New York__Allegany County ins rates 2009 08.pdf
— February 2010 (pdf file)
http://www.medicareforall.org/files/New York__Allegany County ins rates 2010 02.pdf; the highest premium went down by February 2010, but the minimum went above three thousand dollars per month.
— current rates:
http://www.ins.state.ny.us/hmorates/pdf/Allegany.pdf

Insurance rates for all counties in New York state:
http://www.ins.state.ny.us/ihmoindx.htm