The fact Gov. Andrew Cuomo is trying to use brute force to keep health insurance companies participating in New York’s Affordable Care Act health care exchange is all the proof one should need that Obamacare is broken.
Recently, Cuomo directed the state Health Department to ban insurers who withdraw from offering qualified health insurance plans on the state’s marketplace from contracting with the state’s health programs. Cuomo is betting that blocking access to the state’s Medicaid, Child Health Plus and Essential Plan business is enough to keep health insurers from pulling out of the exchange.
Health insurance companies have initiated requests to the state Department of Financial Services for individual and small group rate increases. Sixteen insurers have submitted individual rate increases while 20 companies have submitted requests for small group rate hikes. Fidelis is asking for state approval to increase individual rates by 8.5 percent while Independent Health Benefits Corporation is requesting a 14.5 percent increase in small group rates.
Those are likely not going to be the rates that are charged, mind you. The state sets insurance rates. So, while the companies say they need large rate hikes to keep their plans solvent, the state is likely to set the rates lower than the companies are requesting. Keeping the rates as low as possible is good for those trying to buy insurance. It’s also good for those trying to make the case the health care exchange system is working. Setting insurance rates too low, however, means health care plans are likely to lose money. Cuomo’s strong-arm tactic means he is requiring companies to continue offering money-losing plans.
Cuomo’s bullying of the health care industry is good politics, but bad policy. He should spend less time right now on the politics of health care and set his attention to helping fix health care.
