ALBANY, N.Y. (WTEN) — If the rising costs of gas and groceries weren’t enough, health insurance premiums could also increase. Health insurance premiums are linked to many different variables. Reasons for the increase in costs are ongoing effects of the pandemic, health insurance taxes, drug manufacturers, and underlying health care costs.
Eric Linzer, President, and CEO of the NY Health Plan Association said health insurance rates have already increased in the past two pandemic years. With only “necessary appointments” recommended due to the pandemic, patient care that was needed was pushed back to a later time.
“And that care came back more complex and therefore more costly, those costs get factored in, there were increases the last couple of years but in some instances, they didn’t always reflect the full cost of services and the cost of care for the current year,” he said.
Linzer says decisions the state Legislature makes can also contribute to higher premium costs. He’s referring to legislation that prohibits any kind of change in health plan formularies. Also known as a list of prescription drugs covered by a drug plan. There is also a law that prohibits certain copay accumulators from going towards deductibles. Legislation to repeal this bill has passed both the Senate and the assembly but has not yet been signed by the Governor.
“If we’re going to get those costs under control and make premiums more affordable for individuals and employers it’s important that policymakers look at what the underlying costs are. 82% or more of the premium dollar goes to pay for doctors visits, hospital stays, prescription drug costs,” said Linzer.
Proposed legislation Linzer mentioned would require drug manufacturers who are planning a price increase of more than 10% to provide an early warning to the state, “This would allow health plans, employers, and the state to factor in and prepare for those increases that would go a long way to at least provide on some level accountability for big Pharma and the prices that they charge,” he said.
Health plans filed their proposed rate increases back in May, the States Department of Financial Services is reviewing these rate requests. By early August, they will announce the final approved rates.