A disagreement between health
insurers in New York State and the New York Department of Financial
Services (DFS) over disclosure issues has ended in victory for the
department’s superintendent Benjamin M Lawsky.
The conflict was sparked by
the DFS’ ruling in September that health insurers in the state must
make planned rate increases public.
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The initial reaction by 10
insurers, including UnitedHealth, the largest health insurer in the
US , was to file formal legal objections.
In late-October, UnitedHealth
became the first insurer to withdraw its legal application and
agree to comply with the DFS’ directive.
UnitedHealth was followed
shortly afterwards by Aetna Health, EmblemHealth, HealthNow, Empire
HealthChoice and Excellus Health Plan.
According to the DFS, the six
insurers represent 85% of the New York health insurance
market.
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By GlobalDataUnder a law passed in 2010,
health insurers are now required to seek the DFS’ approval for
insurance rate increases for individuals, small groups and some
large groups.
The DFS reports that so far,
for contracts that start on or after 1 January 2012, health
insurers requested weighted average increases of 12.7%. The DFS has
granted increases of only 8.2%, which is below the expected
increase in medical costs. The lower increase, noted the DFS, will
save consumers more than $400m in 2012.
The DFS was formed this year following the merger of the
New York State Banking Department and the New York State Insurance
Department.
