Health insurance taxes raise rates in NY
We have been following the story of the $700 million taxes recently added by New York legislators in the form of additional health insurance premiums and other subsidies paid by insurance companies and their members. This approach seems shocking in this period of recession and high unemployment when employers who are increasingly tempted to cut back or eliminate employee health insurance plans. Yet NY state lawmakers apparently feel that additional taxes on those who choose to buy health insurance is the best way to provide health benefits to those who do not have health coverage.
Health insurance companies in central New York State rexently announced these rate actions in response to the premium taxes:
MVP Health Care customers are hit hardest. The New York Insurance Department approved rate increases of 3.5 to 9.5% to account for ordinary health care inflation on January 1 of this year. Now additional premium increases of 4% to 8% are scheduled for July 1 due the the premium taxes. This insurance plan went from being one of the least expensive in central NY to one of the most expensive in the area a matter of less than 12 months.
Unitedhealthcare rates increased only 0.1%. because of the premium taxes on June 1 for large companies but is not changing rates for smaller companies. We have separately reported that this company seems to be effectively controlling costs with innovative managed care programs. This insurance company was recenty chosen by AARP to offer insurance to its individuals members seeking more affordable coverage.
Blue Cross raised its rates locally by 8% at the beginning of this year but is not raising rates again this year to adjust for premium taxes. This move will likely attract additional members now who may be affected by a sharper increase for 2010.
All insurance company comments seem to hedge on the possibility that premium rate hikes will be larger in 2010. Supplemental health insurance may be exempt from the new premium taxes so these insurance plans may gain appeal for New York insurance buyers.
MedSave.com maintians a Web page listing New York's most affordable insurance and other benefit plan options.Tags : unitedhealthcare, blue cross