Excellus Health Plan, Inc.Individual2019 Public Comments

Excellus is asking for a 10.5% rate increase. That would mean an addition $70 a month out of my pocket. I can't afford my health insurance anymore. Rate increases should be based on CPI not some unrealistic number Excellus comes up with. Please do not approve this increase or any increase. In the past two years my insurance has gone up by 25%. This has to stop.

These premiums have been going up by double digits for years while inflation is less than 2%. I suggest that DFS opens up competition across state borders. Only then will the bloated corporate structures be forced to deal with real competition. Then this nonsense will get reigned in.

Do not increase my rates. My premium already increases every year. I specifically chose the Base plan, which is the least expensive one. If it becomes unaffordable I will have no way of getting health insurance for myself. I am self-employed and earn just a little too much for assistance from the marketplace but not enough for a nice plan.

I hate going to the doctor, so I rarely go. I only have health insurance in case I go to the hospital and not to pay a fine. I picked my health insurance because it was the cheapest I could find on the exchange. They are charging exorbitant fees each month. When the new year came, the prices went up. 8.7% is a huge increase. I have not had a raise in years. It is unfair. I see the insurance company has very nice buildings and offices. They are not spending our money wisely. I am forced to accept their prices, so I would appreciate no increase. Thank you.

Excellus Health Plan, Inc.Individual2019 Public Comments

To whom it may concern, My name is and I am sending this email in regards to the notice of increase in premiums for 2019 I was given from my employer, In the past year from 2017 to 2018, there was a significant change in costs to health insurance plans that were significant enough for me to change for Excellus's Simply Platinum 2 plan to their Simply Gold 5 plan. The prime drive was monthly premium cost. While significantly lower, the Simply Gold 5 plan had the drawback of higher co-pays needed for medication, care, and other services. Having to have a precsription refilled every month is a huge deal not just as a patient with and to prevent the but the financial burden it takes every month. While my impact is fairly low, (approx. $58 a paycheck, and $50 once a month for my meds) I want you to consider the effect this will have on those who need several meds and have multiple appointments every month that require high copays like mine. With my salary, and what little I need, it seems mimimal. But for those who need more done, well i don't think I need to explain too much, but just keep adding more, and more, and more on top of my costs. I understand the goal of any business is to obtain profit for service and products and achieve annual growth. Its how all businesses function. But here is something to consider. The people that you serve need the medicine you pay in part for us to survive. We survive on our income. Take too much of our income, we won't have the money to pay even the copays just for the essentials to merely survive with the health conditions we have. In result, your customers potentially die, or suffer severly to where finances become even bigger issues, and then there will potentially be far less people able to even be on your plan. (people on the planet also) I ask that you reconsider your rate increase for those of us on these health insurance plans to let those who are in stable condition, those in unstable condition, and those severly struggling to just get by, to give us simply just a better daily piece of mind as we already struggle enough financially as a nation. These cost increases will just make what is already bad enough for everyone, even worse than we need them to be. I may be reached by phone at or simply reply to this email if anyone wishes to discuss this matter further. Thank you Sicerely,

I do not believe that 24% insurance premium is fair to the people who have to pay it and every other utility. Health insurance shouldn't be a luxury .

10.5% increase is way too much! Year after year the premium goes up many times that of the CPI. Rates go up and I am forced to reduce my coverage. $9,000 per year for Silver Standard!!???? Unless DFS limits the increase, insurers will raise until their hearts content.

If this proposed increase should be approved I will be paying close to $1,000 a month for my insurance. I am years old and cannot retire because I can't afford my insurance unless I work. Great way to enjoy my golden years! I believe the administration is grossly overpaid by Excellus and maybe a pay freeze might be in order. Please take into consideration the financial situation of people like myself who struggle to get by each month.

Excellus Health Plan, Inc.Individual2019 Public Comments

A near 5% increase per year for dwindling coverage is unsustainable. I have never in my life felt as vulnerable and helpless when it comes to my healthcare.

I have just received my notification from my insurer, they are requesting an 8% increase in premiums for 2019 due to decreased revenue. I do not understand when this article of high record revenue was published in February of this hear. SYRACUSE, N.Y. -- Excellus BlueCross BlueShield nearly doubled its profits in 2017 and gave its top executive a 13 percent pay raise. The Rochester-based health insurer generated net income, or profit, of $182.3 million last year, up from $99.5 million in 2016, according to a report filed today with the state. Excellus made more money than expected because of lower than anticipated medical expenses, favorable investment income and efficient administrative expenses, the company said in a prepared statement. The insurer's net income was 3.2 percent of the $5.6 billion it collected in revenue. That's the highest net income percentage since 2011. is a very rural area and the minimal though appreciated 3% annual increases to salary only keep putting us behind. Thank you for accepting and reading my statement

I object to the proposed increase of 8.9%. It is completely unreasonable and usury. If rates increase at this rate every year health insurance will be beyond the reach of too many more people. These rate increases are literally killing people. A more reasonable rate would be 3%. Excelleus should live within its means like the rest of us! Have some decency.

When cost of living has been at or below 2% for over a decade and wages have remained stagnant for over 30 years, a rate increase of almost 9% in one year seems mismatched to the circumstances of the region served. Rate payers have borne the brunt of pricing abuses by pharmaceutical companies and hospitals but do not have the clout of insurance companies to push back. This rate increase should be cut in half to encourage insurers to look for savings in scaling back executive compensation, and using their lobby powers to counter drug and hospital rates that increase by fiat rather than fiscal obligation.

I received a letter from Excellus with regard to a proposed premium rate change. I wish to express my disagreement with such an increase. I currently have a condition which has resulted from the surgery I had. I pay $902.42 per month currently which is a burden to my monthly fixed income. I can not afford to see an increase of any sort let alone 9.9% or higher. Please disapprove of this proposal. Thank You!

Excellus Health Plan, Inc.Individual2019 Public Comments

I received a letter stating that BCBS was applying to increase my premiums. The letter said I could comment or appeal this within 30 days of the date mailed. There was no specific date other than May,2017, and I received the letter in June! At this time it already quite hard enough for me to afford the current premiums. 2016 is about half over and I have made a total of roughly $18,000. I can not manage an increase, and I beg you to NOT approve an increase in my premiums, but to keep them as they are! Thank you,

We received a rate increase very recently so to receive a letter indicating another increase is overwhelming. My husband and I pay 100% out of our own pockets for this plan. Our high deductible plan covers a minute amount. I have stopped seeing my PCP every 4 or so months because I can’t afford the at least $100 office visit, $150 or so blood work per visit on top of our monthly premium. I have a appointment this week that I have cancelled because I cannot afford the office visit plus she will undoubtedly prescribe a medication that I cannot afford. I have forgone medication due to the $200 - 300 cost for a All of this and we are HEALTHY PEOPLE! We see our doctors for everyday wear/tear on our bodies. We don’t smoke, we eat healthy and we are active but all of that and we still need to see our specialists. Its very frustrating to pay copious amounts each month while others pay next to nothing for their healthcare who do not have a healthy lifestyle. I feel we should get a break for taking care of ourselves at home and only seeing our Doctors for normal check ups and minor concerns. I just don’t know what to do next. What do you suggest?

MED America Long Term Care Insurance (An Excellus Company) premium increase of 86.8%! Hello, I received a notification for premium increase of 86.8% for my long term care insurance as of July 2019. When I called MED America, they said it was approved by you? and that even they were surprised that the increase went trough! Needless to say I am SPEECHLESS that an increase like this was approved! I would like someone to explain to me how an increase like this can be approved by your department! Sincerely,

Excellus Health Plan, Inc.Individual2019 Public Comments

My comment is simply, deny premium rate increases for 2019, thereby creating financial incentive for healthcare insurance companies to lead and participate in systemic healthcare cost reduction. The current approach to annually increase premiums based on expected costs is systematically designed to raise premiums every year. I understand insurers identify quality improvement expenses in their reports and these contribute to their Medical Loss Ration (MLR), but this incentive is not adequate. The payer needs to lead he charge in improving US healthcare and efficiency. The payer is getting a bad deal from providers. You know the numbers. According to the World Health Organization the US healthcare system ranks 37th in efficiency while spending over 2x per capita (almost $10K). On average developed countries spend 9% of GDP and the US spends 17.2%, according to the international alliance Organization for Economic Cooperation and Development (OECD). Insurance companies are paying for this poor performance and they need financial incentive to institute changes that improve the efficiency of the US healthcare system. Just passing the inefficiencies on to us to pay in premiums will assure no change is made. The truth is many people that purchase health insurance today, actually do not have access to healthcare they can use. That is, after paying a hefty monthly premium, many people can not afford to pay the out-of-pocket fee required by high-deductible plans. It follows that many people are forgoing care they need because the monthly premium has drained the funds they need to pay for their care costs that fall below their deductible. The OECD reported 22% of Americans skipped medical consultations due to concerns about cost (compared to OECD average of 9.1%). For me, I will not renew my healthcare insurance when this term ends. I will deposit the premium amount in a savings account to create a financial reserve. As the reserve builds, I will have funds to pay for medical expenses. At about $1K per month, this will build quickly. If I have a medical event that has costs beyond my financial reserve, I will negotiate a discounted fee with my provider and agree on a payment plan that is equivalent to my current monthly insurance premium. I have found providers are quite cooperative in both the dissenting and direct pay arrangement. Please take a stand and incent payers to lead change.

This is a high deductible health plan ($11,000) which is least subject to adverse selection for the insurer in a take-all-comers regulatory environment. I have to believe that this Bronze plan must have an accretive effect on the insurer's loss ratio compared to other plans that do not discourage frequent visits to the physician or emergency room by means of high co-pays and deductibles. A plan such as the one I have for which Excellus is applying for a rate increase of 8.7% encourages judicious use of the insurance. Health care resources are like everything else--they are limited and when they are overused, basic economics dictates that the costs will go up. Ownership in one's own healthcare needs to be encouraged; the perception that it is free or some sort of basic constitutional right only brings about overuse and abuse. If Excellus is trying to subsidize the costs of their low deductible/low co-pay plans by shifting some of the cost to high deductible/high co-pay plans, the department should send their proposal back to them for revision based on where the expenses to the Company are coming from. Thank you,

I just received notice that Excellus blue cross blue shield put in a request with the state to increase rates 2.9% . This is absurd, insurance rates keep increasing making it not affordable to even carry health insurance.

Excellus Health Plan, Inc.Individual2019 Public Comments

I was recently informed that Excellus has requested a 8.7% increase in premiums for my HIGH DEDUCTIBLE health plan. I find myself and my wife in the gap between corporate coverage and Medicare So for health care, I have one choice in my area that my doctors accept and that is Excellus. Since we joined in April of 2015 ( a little over 3 years ago), our rates have increased 52%. (The compounded effect of year over year increases). When inflation is running around 2% and has been during that 3+ year period , my rates should have gone up a compounded 8% not 52%. Neither my wife nor I have any health issues and neither one of us are on ANY prescription drugs, yet we are paying over $1000 per month for a high deductible plan that is proposed to go over $1100 next year if the rate increase is approved. My suggestion is to implement a inflation based rate increase cap much like Gov. Cuomo did for school taxes. If schools raise taxes more than the inflation rate, they lose state aid, Why not a similar plan for Ins. Company increases. There needs to be some push back in the system to put pressure on the rate increase flood. Please advise as to the plans to limit Insurance companies from 4 times the inflation rate increases on health care plans. Thanks for your time.

Unknown Insurer2019 Public Comments

-----Original Message----- From: Insurance Inquiry Sent: Friday, June 08, 2018 9:42 AM To: Subject: NYS Department of Financial Services Consumer Assistance Unit Inquiry : Your inquiry submitted to the NYS Department of Financial Services Consumer Assistance Unit has been received and will be reviewed promptly. The information you entered is as follows: Your Name: Email:

Your Company/Organization: Daytime Telephone#: You are a(n): CONSUMER Type of Insurance question/comment: HEALTH Your Questions and/or Comments have been recorded as follows: * * * * * * * * * * * * * * * * * * * * * * * * * Why do health insurance costs go up every year without fail? And why do you use obfuscating language in your increase notice. "Modify"! "Change"! oh please! This is a shameful racket and anyone- anyone who plays a part in it should be ashamed of themselves. Wake up and be human! * * * * * * * * * * * * * * * * * * * * * * * * * Sincerely, New York State Department of Financial Services Consumer Assistance Unit. email at: consumers@dfs.ny.gov

Excellus Health Plan, Inc.Individual2019 Public Comments

While no body like increases, I understand them when they are required by individuals who use and sometimes abuse these insurance plans. As a subscriber who has rarely if ever uses the insurance, I know I need it in the event of a catastrophic situation - however, Excellus BC/BS has taken enormous increases steadily over the last 5 years, and if this increase is approved again, I will be paying nearly $8k a year FOR MYSELF ONLY for health insurance. This is not right for any single individual - it is a financial burden as it is to fork out $7.3K to fund my current insurance with high deductibles and high out of pocket expense in the event of an illness. I beg you to please block this additional increase and ask Excellus BC/BS to cut their spending , maybe their executive bonuses, and let the little guy not have to be gouged once again. It's nearly impossible to make it work with the current pricing scale - PLEASE - help us to keep this increase from happening.

Excellus Health Plan, Inc.Individual2019 Public Comments

I am delighted to have the opportunity to comment on BCBS Excellus’ premium increase. First, there is no shortage of research on the relationship between wealth and health. (Here’s one study: https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf) Statics are clear: the wealthier the individual, the more likely they are to be significantly healthier than lower income individuals. May we posit that it’s because they can actually afford health insurance that adequately allows them to receive medical care? The rest of us are so drained from paying for insurance that our high premiums, co-pays, and deductibles all but make it impossible to receive prompt, regular care. Our reluctance and/or inability to afford those expenses limits our productivity and participation in many other activities, wage earning or not. There is no wealthy person who better able to take advantage of the very best healthcare available than BCBS Excellus CEO, Christopher C. Booth. Mr. Booth’s income should be an embarrassment to every board member of that corporation. To cite only the last two years’ increases in his compensation, Mr. Booth received a 9% increase, raising his 2015 salary of $192 million to $2.09 million in 2016. During 2016, Excellus Blue Cross Blue Shield made a profit of $99.5 million, which is not too shabby for a “non-profit” that paid so much to its CEO, along with over $200,000 to 107 employees. At the same time, the per patient reserve fund that BCBS keeps on hand was $1009 per patient, while other upstate non-profits maintained $163 more per patient, or $1193. And if 9% for 2016 seems like a big raise, it’s paltry compared to the 13% increase that Mr. Booth received in 2016, bringing his total comp to 2.36 million. In those two years, the company’s profit doubled from 99.5 million to 182.3 million. That represents a 3.2% increase in profit, although Mr. Booth’s stated goal is to keep profits under 2%. It’s difficult to see why the company “needs” to raise premiums when personnel compensation is so high and profits so fabulous. Just to make the numbers more relevant, Mr. Booth’s 2016 salary amounted to $5,260.27 per day, including weekends; with the 13% increase in 2017 it was $6,465.75, every single day of the year. Doesn’t that seem like a lot of money to you? Wouldn’t one think that based on Excellus Blue Cross Blue Shield executive compensation, at every level, that premiums should not only not increase, but perhaps, in order to achieve Mr. Booth’s lofty goal of keeping profits below 2%, they should be reduced? Based on a ten hour work day at Mr. Booth’s pay, the two plus hours I’ve cobbled together (from my one full time, two part time jobs) to write this letter, I should have earned $1616.44. I Based on the numbers, it appears that the rate hike increase proposed by Excellus Blue Cross Blue Shield is nothing more an effort to maintain or increase profits and executive compensation, and certainly not in the best interests of its subscribers or their health and healthcare expenditures. For example, I already pay $904.00 per month, and that is not even for the top line of coverage. I have a $35 specialist copay, a $15 regular office visit, and a deductible of over $1000. The bottom line? Excellus Blue Cross Blue Shield, its executives and employees, and, especially, Mr. Christopher Booth, are all doing fabulously well. The rest of us, by contrast, not so much. There is nothing in the letter from BCBS proposing the increase that justifies raising our premiums. I suggest that Mr. Booth, et al, need to lower their expectations, as well as their compensation. A company that can afford that level of remuneration for its employees doesn’t need to bleed the rest of us.

Our health insurance premiums from Excellus BCBS are going up astronomically. The monthly premium for a family of 4 is already way too high. Now they are proposing another 9.9% increase. This all comes out of our pocket. The Milliman Medical Index reported early in June 2018 that the index had increased ONLY 4.5% this year, and so my concern is that Excellus should only be charging that amount or preferably less. There is NO basis for a 9.9% increase, as health insurance costs are actually slowing, and this year is the lowest rate of increase in over two decades. (Milliman) PLEASE try and keep these insurers from increasing their rates beyond what their underlying costs actually are. Thank you.

Excellus Health Plan, Inc.Individual2019 Public Comments

I can barely afford the health insurance I get now. Every year the price goes up and so does the deductible, so I am paying more and getting less coverage. If it goes up again, I will probably have to give it up entirely.

Hi Bluecross blue shield has sent me a notice that my health insurance premium will change and it will be raised. I am a healthy person and have individual insurance with high deducible. I will use the health insurance only in case of emergencies and regular yearly check ups. I am years old go to the gym, keep myself fit and eat healthy. This is the second time in last two years that they are hiking the rate. I feel that this is very unreasonable. It feels like they are randomly hiking rates every year as there are no checks and balances.

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June 28, 2018 Maria T. Vullo, Superintendent Troy Oechsner, Deputy Superintendent for Health John Powell, Assistant Deputy Superintendent for Health NYS Department of Financial Services One Commerce Plaza Albany, NY 12257 RE: Requested Rate Changes – Excellus– Individual – 131472838 Dear Superintendent Vullo, Deputy Superintendent Oechsner, and Assistant Deputy Superintendent Powell:

Health Care for All New York (HCFANY) is a statewide coalition of over 170 organizations dedicated to achieving quality, affordable health coverage for all New Yorkers. HCFANY believes that the public rate review process is a vital consumer protection and is grateful for the opportunity to submit comments on the rate requests submitted for 2019’s individual plans. The comments below address concerns about the market as a whole before offering specific comments on Excellus.

I. Market-Wide Comments

A. Action is needed beyond the rate review process to stabilize New York’s individual market.

HCFANY is concerned that New York’s insurance companies have not successfully

controlled costs in the individual market. This year, the carriers seek an average 24 percent rate increase for the 2019 individual market plans.1 This is the fifth year in a row that the requests have been in the double-digits for the individual market (the previous four years of requests and approved rate changes can be seen in the chart below).

1 New York State Department of Financial Services, “Proposed 2019 Health Insurance Premium Rates for Individual and Small Group Markets,” June 1, 2018, https://www.dfs.ny.gov/about/press/pr1806011.htm.

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Average Requested and Approved Premium Increases New York’s Individual Market 2015-20182

Request (Percent) Approved (Percent) Percent Change 2018 17.7 14.5 -18.1 2017 19.3 16.6 -13.9 2016 10.4 7.09 -31.8 2015 12.5 5.7 -54.4

Such large increases cause immense hardships for those New Yorkers who receive little

or no financial assistance through the NY State of Health Marketplace. Fortunately, most people (59 percent) in the Marketplace do receive help through tax credits that are based on income and grow as prices increase.3 As a result, many are insulated from rate increases. However, 41 percent of people who enrolled in qualified health plans last year received no assistance.4 That means they bear the full brunt of any approved premium increases. HCFANY is concerned that approving rate increases so far above the rate of medical inflation will eventually result in enrollment declines and ultimately, an insurance “death spiral” that would catapult premiums beyond the reach of anyone ineligible for assistance.

HCFANY commends the Department for its past efforts to safeguard consumers by reducing the carriers’ average rate increases substantially and urges it to do so again this year. HCFANY’s recommendations for doing so, based on a close reading of the applications, are below. HCFANY additionally asks that the Department and other state leaders take more forceful action outside of the rate review process to stabilize the individual market. High premiums force New Yorkers to choose between health care and necessities like housing and food.5 Those choices continue even after someone gains coverage as they make their monthly payments and face increasing cost-sharing.6 High premiums also contribute to disparities in well-being between white Americans and others. Adults who are black are much more likely to report an inability to afford basic necessities and health care than adults who are white.7 Adults who are black or Hispanic are more likely to have had medical bills turned over to debt collectors than those who are white.8

2 For 2018, see https://www.dfs.ny.gov/about/press/pr1708151.htm. For 2017, see https://www.dfs.ny.gov/about/press/pr1608051.htm. For 2016, see https://www.dfs.ny.gov/about/press/pr1507311.htm. For 2015, see https://www.dfs.ny.gov/about/press/pr1409041.htm. 3 New York State of Health, 2018 Open Enrollment Report, May 2018, page 5, https://info.nystateofhealth.ny.gov/sites/default/files/NYSOH%202018%20Open%20Enrollment%20Report_0.pdf. 4 Ibid. 5 NORC and the West Health Institute, “Americans’ Views of Healthcare Costs, Coverage, and Policy,” March 2018, page 2, http://s8637.pcdn.co/wp-content/uploads/2018/03/WHI-Healthcare-Costs-Coverage-and-Policy-Issue-Brief.pdf. 6 NORC and the West Health Institute, page 8. 7 Ibid. 8 NORC and the West Health Institute, page 6.

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The role of private insurance companies is to pool risk for large numbers of enrollees and negotiate and control prices on their behalves. This year, as in the past, the carriers’ applications state that providers are so powerful that this process cannot take place. If this is true, New York should take steps to control prices in the individual market and ensure that people who purchase their own plans have affordable coverage options. Other states have been more successful in keeping prices down in the individual market. For example, Minnesota has implemented a reinsurance program that has resulted in substantial declines in its individual market rates (between 3 and 12 percent).9 To control prices in the individual market, New York should consider the following strategies:

1. Provide premium assistance to people who make above 200 percent of the federal

poverty level. Increased premium assistance would stabilize prices by increasing the size of the risk pool. The more enrollees insurers have, the more they can spread the costs of care across individuals. Ideally, premium assistance would be available to everyone based on income. Encouraging greater participation by some groups could particularly help stabilize the individual market without great cost. Young people, for example, have lower incomes and lower health risks than older people. This means they are more likely to gamble against buying health insurance when dealing with tight budgets. Providing assistance to them would attract more people into our individual market who are lower risk. Insurers would be able to lower costs benefitting many in the market, and young people would have financial security in the event of a health emergency.

2. Create a drug utilization review board for commercial plans in the individual market

similar to the review board that exists for Medicaid. All of the carriers cite increasing pharmacy prices as a reason for premium increases. For example, HealthNow estimated that medical prices would only increase by 3 percent while pharmacy prices would increase by 9.5 percent. Since so many insurance companies report being outmatched by the pharmaceutical industry, the state should consider intervening. New York’s Medicaid program has a Drug Utilization Review Board charged with reviewing clinical information and making recommendations to the Commissioner of Health on drug coverage.10 The Board’s meetings are public, it includes consumers, and the process for nominating members is transparent. Such a Board could ensure that consumers benefit from any rebates and could negotiate for lower pharmacy costs across the market.

3. Consider a public option such as an Essential Plan Buy-In Program. The state should

allow more people to participate in the Essential Plan as an affordable alternative to the individual market. The Essential Plan provides comprehensive coverage to people who earn between 138 and 200 percent of the federal poverty level.11 Participants at the highest

9 Minnesota Commerce Department, “Health insurers propose decreased average rates for Minnesota’s 2019 individual market,” June 15, 2018, https://mn.gov/commerce/media/news/?id=342571 . 10 New York Department of Health, Office of Health Insurance Programs, “Medicaid Drug Utilization Review Board General Operating Procedures,” https://www.health.ny.gov/health_care/medicaid/program/dur/docs/operating_procedures.pdf. 11 Empire Center, “A surprising surplus in Albany,” February 14, 2018, https://www.empirecenter.org/publications/a-surprising-surplus-in-albany/.

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income level pay only $20 a month; the cost of their care to the state is minimal because most funding comes from the federal government.12 New York could allow people with higher incomes to participate in the Essential Plan and offer state subsidies on a sliding scale. At a minimum the state could allow people to pay full-price to participate in the Essential Plan.

Other states have adopted additional measures that may be worth considering, such as the

state-based individual coverage mandates recently adopted by New Jersey and Vermont.13 Massachusetts has also had an individual mandate in place since 2006.14 Alternately, New York could seek a 1332 Waiver to establish a reinsurance program along the lines of Minnesota or Alaska.15 Finally, New York should seriously consider stepping in for the plans and controlling costs more directly through a Maryland-style global payment model.16 All of these ideas—and more—bear scrutiny in the face of the carriers’ substantial and persistent rate requests and HCFANY urges the Department to establish an Advisory Commission to explore them.

B. Within the rate review process, there are several areas in which we respectfully ask

DFS to question insurers’ arguments and impose greater standardization in their requests.

It is evident that federal activity has had a modest impact on New York’s individual

market. However, New York State has taken important steps to protect companies from those actions. Those steps included increasing the budget for enrollment assistors in the 2019 budget and opting to maintain the three-month open enrollment period. Additionally, under New York’s strict laws, the carriers face little threat from the federal liberalization of rules governing association health plans.

As a result of the state’s actions and an improved economy, New York’s individual

market appears to be stable—not contracting as some carriers claim. The New York State of Heath boasted an overall increase of 4 percent in 2018 enrollment.17 Although New York’s individual off-exchange marketplace lost enrollment, that appears mostly to be a self-inflicted wound imposed by the actions of one carrier (Empire) which terminated its entire line of

12 Ibid. 13 Katie Jennings, “New Jersey will become second state to enact individual health insurance mandate,” Politico New Jersey, May 30, 2018, https://www.politico.com/states/new-jersey/story/2018/05/30/new-jersey-becomes-second-state-to-adopt-individual-health-insurance-mandate-442183. 14 Ibid. 15 Cheryl Fish-Parcham, “Alaska’s Reinsurance 1332 Waiver: An Approach that Can Work, Families USA, August 2017, http://familiesusa.org/product/alaska-reinsurance-1332-waiver-approach-can-work and 2017 Minnesota Session Laws, Chapter 13—H.F.No.5, https://www.revisor.mn.gov/laws/?year=2017&type=0&doctype=Chapter&id=13. 16 Shah et al., “Maryland’s Global Budget Program: Still an Option for Containing Costs,” The Commonwealth Fund, April 3, 2018, https://www.commonwealthfund.org/blog/2018/marylands-global-budget-program-still-option-containing-costs. 17 Burton et al., “What Explains 2018’s Marketplace Enrollment Rates?,” Robert Wood Johnson Foundation, June 2018, https://www.urban.org/research/publication/what-explains-2018s-marketplace-enrollment-rates.

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individual market products, causing disruption and panic amongst its 50,000 members.18 In addition, more New Yorkers may be securing job-based coverage as the economy has improved. Despite these two trends, with a few minor exceptions, nearly all the other plans gained members between 2017 and 2018.

These conditions may not be adequately reflected in the 2019 rate requests. Thus,

HCFANY urges the Department to carefully review the carriers’ filings in a manner that ensures consistency of rate actions in the following areas: (1) the individual mandate; (2) trend; and (3) administration costs.

1. Increases due to the loss of the mandate should be reasonable and companies with

similar risk profiles should receive similar increases. In 2019, the federal tax penalty for failure to purchase health insurance will be

eliminated. The carriers’ applications contained varied estimates of the impact of this change with adjustments ranging from 0 to 23 percent. It is plausible that the variation of estimates is due to a carrier’s claims experience and premium levels (which make the plan more or less likely to be attractive to someone on the fence about buying a plan). However, this explanation for the diversity of estimates is belied by the fact that carriers with apparently similar risk profiles are asking for vastly different increases. For example, Oscar and Fidelis have similar average claims costs, yet Fidelis asks for a 23 percent increase to make up for losing the mandate while Oscar asks for just 7 percent.

To ensure that all New Yorkers in the individual market are treated fairly and equitably,

the Department should consider imposing a cap on the individual adjustment mandate—such as 6 percent, which is the average across all carriers. Those carriers that filed adjustments below 6 percent should be granted the adjustments that they seek (e.g. 0 to 6 percent) and everything above would be reduced to 6 percent.

2. Medical trend estimates vary too much. The state should require a standardized

trend, either for the entire state or for regions. The carriers estimate medical trend between 5.1 and 11.5 percent. While most of the

trend requests are within the ranges seen in national estimates (between 4.5 and 8 percent), there are reasons to think that New York’s insurers could do a better job of managing these costs.19 For example, many of New York’s plans only offer in-network coverage and those networks are

18 Empire’s 2017 Rate Filing indicates that it had 54,000 members, while its 2019 filings now indicate that it has just 24,000 enrollees. In the interim, Empire retired its individual market offerings and re-filed a new product that was 47 percent more expensive than its predecessor. 19 American Academy of Actuaries, “Drivers of 2019 Health Insurance Premium Changes,” June 2018, http://www.actuary.org/files/publications/Premium_Drivers_2019_061318.pdf; Girod et al., “2018 Milliman Medical Index, May 2018, http://www.milliman.com/uploadedFiles/insight/Periodicals/mmi/2018-milliman-medical-index.pdf; and PwC Health Research Institute, “Medical Cost Trend: Behind the numbers 2019,” June 2018, https://www.pwc.com/us/en/health-industries/health-research-institute/assets/pdf/hri-behind-the-numbers-2019.pdf

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increasingly small.20 Most estimates of annual medical trend changes are based on information from the employer market, where networks and benefits are often more expansive. That could be a reason to believe that medical trend should be lower for New York’s narrow network plans.

Additionally, it is unclear why carriers in the same state and even in the same regions of

the state should report such variation in medical trend. Each year, HCFANY notes in our rate review comments that the carriers do not provide enough information about how they arrive at their trend estimates. While the applications have improved in some ways over the years (for example, fewer redactions), not enough applications include a breakdown of trend into pharmacy versus medical costs. When they do, the carriers rarely provide a narrative explanation of how they manage costs, other than to argue that provider consolidation means they cannot reduce medical spend.

As an intermediate step, the Department should consider requiring carriers to provide

better information about their trend estimates. The most helpful way for carriers to provide this information is through a trend breakdown showing the following: inpatient facility care, outpatient facility care, professional services, pharmacy, and other. This is helpful because it is the way that the Milliman Medical Index is reported, which provides a comparison point.21 Some carriers did provide that information, including Excellus, Healthfirst, and Independent Health. Additionally, if all carriers provided this information the public would be able to compare their own insurer’s performance to a statewide or regional average. HCFANY recommends that either Exhibit 18 or 13a be modified to require this information, or that the Department creates a new exhibit that shows a detailed trend breakdown.

More importantly, the Department should consider adopting a standardized medical and

pharmacy trend cap for individual market carriers and requiring them to stay under the state limit. This measure could be implemented on a statewide or regional basis.

3. Administrative costs should be decreasing over time. The Department should

consider imposing a cap to guard against extraordinary administrative costs. Overall plans are asking for slightly lower administrative costs this year (12.1 percent

versus 13.9 percent in their requests for 2018). But plans have had six years of experience operating in this market. New York State invests significant resources into marketing qualified health plans and making it easy for people to enroll and renew. The Department should investigate why administrative costs have not decreased more, and closely question plans whose administrative costs are increasing.

The range of administrative costs in the 2019 requests is also very wide, from 8.2 percent

to 17 percent. Companies that spend much more of their premium dollars on administrative costs than peers should explain their performance in a detailed manner. Above-average rate increases from companies that also have above-average administrative costs deserve special scrutiny. The 20 University of Pennsylvania/Robert Wood Johnson Foundation, “State Variation in Narrow Networks on the ACA Marketplaces,” August 2015, http://ldi.upenn.edu/sites/default/files/rte/state-narrow-networks.pdf 21 Girod et al.

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Department should also consider imposing a cap on administrative costs that are far above average.

II. Issues Specific to Excellus

Excellus is the second largest upstate nonprofit health insurance carrier in New York. The plan currently has 24,000 members and projects 27,000 in 2019, a 12.5 percent increase. It appears to be financially healthy. It boasted profits of $182.3 million in 2017, an increase from 2016.22

Excellus is asking for an average rate increase of 8.9 percent for 2019. This is below the

average for New York’s individual market, which was 17.8 percent.23 The rate Excellus requested for 2018 was only 4.4 percent, the lowest in New York’s individual market. Its members have experienced relatively small rate increases over the years, only about 14.5 percent between 2016 and 2018.24 Even if granted its full request for 2019, they would have only experienced a 25 percent increase over four years. While significantly higher than overall or medical inflation, this is on the low end for New York’s individual market. Positive factors in its application include a lower-than-average medical trend. Excellus provided good information about the components of its trend rate, for example by including a breakdown showing the differences in inpatient facility, outpatient facility, professional, and pharmacy trends. Another positive factor is that Excellus reasonably asked for a 1.5 percent profit margin.

However, even though it is controlling costs better than other New York carriers, the 14.5

percent increase its members experienced between 2016 and 2018 is still difficult for many households to manage. In the same time period, inflation was only 4.8 percent. HCFANY identified the following areas to examine in an effort to reduce the company’s request: administrative costs, its medical loss ratio, the adjustment it requests for losing the individual mandate, and information missing from the application about provider network changes.

A. Excellus may be able to reduce administrative costs.

The administrative costs expected by Excellus for 2019 are 12.5 percent, close to the state

average of 12.1 percent. However, Excellus reports that $6.29 of its per-member per-month rates are related to broker commissions. Brokers are of decreasing importance in the individual market now that New Yorkers have access to the New York State of Health. Some people do prefer using brokers to the New York State of Health, but it seems reasonable to expect that this number would go down over time. HCFANY asks that the Department examine broker costs for 22 Henry L. Davis, “Health insurers have healthy financial reports,” The Buffalo News, May 1, 2018, https://buffalonews.com/2018/04/30/health-insurers-have-healthy-financial-reports/. 23 These are CDPHP, Empire Health Choice, Excellus, Healthfirst PHSP, HIP/Emblem Health, NYQHC/Fidelis, HealthNow, IHBC, MetroPlus, MVP Health Plan, Oscar, and Unitedhealthcare of New York. The applications cover both on- and off-exchange plans for all but MetroPlus and Oscar, which are only offering on-exchange plans. An additional four plans were offering plans off-exchange only, all with under 150 members. Those four plans were not included in the analysis for HCFANY’s individual rate comments. 24 In Exhibit 13a, Excellus reported an average per-member per-month rate of $439.40 in 2016 and $503.28 in 2018. If granted the full request for 2019 the average per-member per-month rate would be $548.05.

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Excellus over the years to see if this is the case, and to only provide a rate increase adjustment for broker fees that corresponds with observed data.

Additionally, Excellus does not perform well on the Department’s measures of customer

service. Improvements in this regard would mean less premium waste managing inappropriate denials or customer grievances. For example, Excellus customers who submit external appeals win their cases at a higher rate than the state average.25

B. Excellus reports a medical loss ratio that is below New York’s 82 percent

requirement.

In Exhibit 13a, Excellus reports a medical loss ratio of just 76.8 percent for 2017. It may be that Excellus has not yet analyzed all the claims required to determine its final 2017 medical loss ratio. However, what is reported in Exhibit 13a is much lower than what was reported by the other carriers. If it is accurate, it is far below the state’s statutory 82 percent requirement for a medical loss ratio. The Department should investigate whether or not Excellus will owe its customers rebates for 2017. If it will, the Department should consider reducing its requested increase to guarantee that excessive premiums are not collected again in the 2019 plan year.

C. The increase Excellus attributes to losing the individual mandate is not in tune with other apparently similar carriers.

As discussed in the general comments, there is a lot of variation in the carriers’ estimates of how the individual mandate affects the market. Excellus asks for a 7.3 percent rate increase due to losing the mandate penalty. The factors that impact how much the individual mandate matters for different carriers include their claims cost and their average rates. Excellus seems similar to MetroPlus on both: claims costs were $483 versus $469 per-member per-month and average rates were $503 and $504 per-member per-month. Yet MetroPlus only expects an impact of 1 percent due to losing the mandate.

As described above in the general comment section, HCFANY asks that the Department

investigate these differences and consider capping individual mandate requests to no more than 6 percent and reduce Excellus’ rate increase accordingly.

D. Excellus redacted information about changes to its provider network in its

Actuarial Memorandum. Narrow networks are common in New York’s individual market and difficult for

consumers to manage. Insurance companies create narrow networks as a way to control costs. Yet it is difficult to understand if the companies are truly passing on those savings to consumers using their rate applications. Excellus did not adjust its rates for network changes in Exhibit 18, line 14 (Market wide adjustment for changes in provider network). It may have incorporated those changes in line 32, where it took a 1.8 percent reduction. HCFANY asks that the 25 New York State Department of Financial Services, page 21, https://www.dfs.ny.gov/consumer/health/cg_health_2017.pdf.

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Department require carriers to be more forthcoming about network changes. It also asks that the Department ensure that when carriers reduce the size of their networks, as Excellus may have done, savings are passed on to customers through lower rates.

HCFANY urges DFS to carefully review the application submitted by Excellus. Thank you for your attention to these comments. Please contact us with any questions at adunker@cssny.org or 212-614-5312.

Sincerely,

Amanda Dunker, MPH Mark Scherzer, Esq Health Policy Associate Legislative Counsel Community Service Society of NY New Yorkers for Accessible Health Coverage