Original article posted by California Healthline on Tuesday, June 2, 2015
Many health insurers have proposed premium hikes greater than 10% for individual health plans sold in 2016, citing higher-than-expected care costs and other unexpected expenses, the AP/Los Angeles Times reports.
The Obama administration released the proposed rates Monday on HealthCare.gov. The premium hikes would apply to plans sold through both the Affordable Care Act’s federal exchange and the private insurance market (Murphy, AP/Los Angeles Times, 6/2).
The proposed rates vary significantly across states and health plans (Ferris, The Hill, 6/1). For example, Blue Cross and Blue Shield of North Carolina proposed a 26% rate increase, and companies in Florida, Illinois and some other states proposed rate increases of at least 20% (AP/Los Angeles Times, 6/2). Tennessee’s largest health insurer proposed a rate hike of 36% for some plans, while New Mexico’s largest insurer proposed an increase of 50%. In Maryland, the state’s largest insurer proposed a 30% rate hike.
Meanwhile, insurers in some states have proposed more moderate increases. For example, insurers in Connecticut have proposed increases mostly around 10%. In New York, the most popular insurer has proposed an increase of 12% (The Hill, 6/1). Further, Michigan’s Blue Cross Blue Shield and Blue Care Network, which insures more than half of the state’s residents, proposed increases averaging about 10%, according to the state insurance department (Eggert, AP/Washington Times, 6/2).
The companies said increasing costs under the ACA’s coverage expansions and rising prescription drug prices, among other factors, were driving the rate hikes (AP/Los Angeles Times, 6/2). In addition, the risk corridors program — an ACA provision under which the federal government subsidized health insurers to help offset high costs they might incur by enrolling higher-than-expected numbers of sick people through the exchanges — has expired, requiring the insurance companies to bear more of such individuals’ care costs.
Proposals Might Not Mean Increased Consumer Costs
Acting CMS Administrator Andy Slavitt said the “rates will be subject to vigorous … review and revision” before taking effect (Demko, Politico, 6/1). State regulators in many states have the authority to reject the proposed increases. Meanwhile, regulators in states that do not have such power are expected to pressure insurers to curb the hikes, according to the AP/Los Angeles Times. The rates will be finalized this summer and should be published by early October, a few weeks before the ACA’s third open enrollment period begins on Nov. 15 (AP/Los Angeles Times, 6/2).
