‘Tough’ on insurers after $40 million hit
Posted December 04, 2019 08:08:49 New York’s biggest insurance company has said it is looking at increasing its premium for the next five years in response to an ongoing health care reform debate in the state.
Key points:The insurer’s premium has soared over the last two years, and is forecast to double again by 2021The company’s new CEO says it is “uncomfortable” with the high cost of insuranceInsurers are now facing increasing pressure to reduce their costs in the face of a healthcare reform debateThe company, which has been hit by a record $40.9 million in losses in 2018, said it was now weighing a range of options to cut its cost, including raising rates and expanding its network.
In a letter to its staff, CEO Tom Walker said the company’s premium for 2021 was now expected to double to $50 per month from $40 in 2021.
“We are in a tough spot.
As a small company we can’t afford to do this without a large amount of cost pressure, which is already impacting our ability to manage our costs,” Mr Walker wrote.”
I do not believe we are ready to cut our premium at this time.”
Insurers were already facing increased pressure from the healthcare reform bill, with many citing the high costs of premiums and out-of-pocket expenses as factors in declining business.
However, New York has become one of the most expensive states in the US, with premiums in the city running $3,300 a month on average.
This is expected to increase as the healthcare debate continues to rage, with the state forecast to lose $300 million in revenue this year and $600 million in 2020.
Insurers have previously warned that a healthcare bill will lead to an increase in healthcare costs for consumers, and it has now been revealed that the insurers were considering raising their premiums as a result.
“This is something that we are weighing very carefully,” Mr Scott said.
“As a result of this, we are not able to make a definitive decision as to how we will react to that in 2021.”
Insurance companies are now faced with increasing pressure from a healthcare debate in New York that has seen millions of New Yorkers hit by costly health care bills, as the state braces for a bill to overhaul the healthcare system.
Last month, New Yorkers took to the streets to protest the high price of health insurance premiums, as they accused the insurance industry of “trying to save us” by offering the cheapest plans.
The healthcare debate has become a key point of contention in the presidential election, with voters in the Empire State heading to the polls on November 8 to choose between the Democratic and Republican nominees.