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The Daily Signal
How
‘Affordable’ Will Health Insurance Be in 2016?
Melissa Quinn
June 01, 2015
For consumers purchasing health insurance under the Affordable Care Act
next year, plans may no longer be quite as “affordable” as they were in
the past.
Health insurance companies around the country are providing states with
their proposed premium rates for 2016, and changes include rate hikes
of up to 51 percent in New Mexico and more than 30 percent in Maryland
and Tennessee.
The proposed rate changes come as the Supreme Court prepares to deliver
its ruling on the case King v. Burwell, which will determine if
consumers purchasing insurance on the federal exchange are eligible for
subsidies, and as Republicans continue to push for a full repeal of the
health care law.
“This is going to be a phenomenon of insurers that priced more
optimistically instead of defensively,” Ed Haislmaier, a senior
research fellow in health policy studies at The Heritage Foundation,
told The Daily Signal of providers with hefty rate increases.
Perhaps the most drastic rate hike comes from New Mexico, where Health
Care Services Corp. requested a 51.6 percent increase to premiums. The
rate hike must be approved by the state.
In Maryland, according to the state’s Insurance Administration,
CareFirst BlueCross BlueShield proposed premium rate increases of up to
30 percent in the individual market for 2016.
“CareFirst has predicted for some time that rates would need to climb
from artificially lower levels due to the characteristics and needs of
the population that has actually enrolled,” the company said in a
statement.
By contrast, Cigna proposed a 2.9 percent reduction in rates.
In Tennessee, BlueCross BlueShield of Tennessee, the state’s largest
insurance provider, requested to raise premiums by an average of 36.3
percent. The rate hike is the most significant in the state.
According to The Tennessean, Community Health Alliance Mutual
Insurance, a nonprofit health insurance co-op, is looking to raise its
rates by an average of 32.6 percent. The co-op, which started under
Obamacare and received more than $73.3 million in federal grants and
loans, offered the cheapest plans for Tennessee consumers in 2015 and
froze enrollment after it saw an influx of customers, eventually
pulling its plans from the federal marketplace.
Meanwhile, Connecticut’s HealthyCT, another co-op started under
Obamacare, asked to raise its rates by 14 percent, according to the
state’s insurance department. UnitedHealthcare, a private insurance
company selling plans on Connecticut’s state exchange, requested an
average rate increase of 12.4 percent.
Haislmaier said local and nonprofit insurance providers, including many
co-ops, kept premium prices low in 2015, but are now increasing their
rates after seeing an influx of enrollees. Insurance companies with
cheaper plans were unsure of how expensive new customers were going to
be, and now, Haislmaier said, those companies are trying to play “catch
up.”
By contrast, larger, for-profit providers such as Aetna, priced more
defensively and are either reducing their rates or increasing them
slightly.
“Insurers that were more optimistic in setting their premiums wound up
having to play catch up,” Haislmaier said. “On one level, it’s
completely Obamacare. It’s catch-up by the ones who underpriced. The
ones who had higher rates had realistic responses to Obamacare, and the
others are playing catch up.”
Some states have already published insurance providers’ proposed
premium changes. The deadline for filing requests for rate changes is
today. Insurance companies asking for increases of more than 10 percent
must explain the reasons for the rate hikes.
States must approve the rate changes.
Read this and other articles with links at The Daily Signal
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