Gov.Andrew M. Cuomo announced on Wednesday that under the new health care law - individuals will see a 50% drop in premiums, for example those paying $1000 a month the premium would now be $ 308 monthly and added with federal subsidies even lower.
Supporters of the Affordable Care Act felt the rates had dropped due to buying on online exchanges and competition among insurers as large numbers were expected to enroll.
"Health insurance has suddenly become affordable in New York," said Elisabeth Benjamin, vice president for health initiatives with the Community Service Society of New York. "It's not bargain-basement prices, but we're going from Bergdorf's to Filene's here."
"The extraordinary decline in New York's insurance rates for individual consumers demonstrates the profound promise of the Affordable Care Act," she added.
New York is among the list of successful states for setting up exchanges and adhering to the law.
"We're seeing in New York what we've seen in other states like California and Oregon — that competition and transparency in the marketplaces are leading to affordable and new choices for families," said Joanne Peters, a spokeswoman for the Department of Health and Human Services.
Majority of New Yorkers are covered by their employers and so will see no changes, but for individual covers - about 2.6 million people don't buy insurance due to high costs. State officials estimate as many as 615,000 people will buy health insurance under the new law. Many individuals in the lower income bracket will be eligible for subsidies.
"New York's health benefits exchange will offer the type of real competition that helps drive down health insurance costs for consumers and businesses," said Mr. Cuomo.
The plans to be offered on the exchanges all meet certain basic requirements, as laid out in the law, but are in four categories from most generous to least: platinum, gold, silver and bronze. An individual with annual income of $17,000 will pay about $55 a month for a silver plan, state regulators said. A person with a $20,000 income will pay about $85 a month for a silver plan, while someone earning $25,000 will pay about $145 a month for a silver plan.
The rates for small businesses, which are significantly lower than for individuals, will not fall sharply. Though small businesses will be eligible for tax credits, and the exchanges will make it easier for them to select a plan. Roughly 15,000 plans are available for small businesses, and making right choices is important.
"Where New York previously had a dizzying array of thousands upon thousands of plans, small businesses will now be able to truly comparison-shop for the best prices," said Benjamin M. Lawsky, the state's top financial regulator.
With the new health law people could now afford to buy insurance, pre-existing illness also is no longer an obstacle.
Hannah Punitha (IRDA Licence Number: 2710062)
Roni Caryn Rabin and Reed Abelson, July 2013