Information was released Monday this week from the Federal Government listing states that requested more than a 10% increase of the 37 states using HealthCare.gov as their exchange. The actual increase allowed will not be determined for weeks, and the public will not be able to see rates until the marketplace opens on Nov 1st, 2015. So we will just have to wait, but many carriers are applying for approval of much higher premiums because they really don't know what the future costs will be for these markets and are preparing for the worst.
According to the article in the New York Times, one of the worst offenders has to be Georgia, where Alliant Health Plans are asking for increases as high as 85% for certain plans. (NOTE: The average increase for all their plans is around 38%, which still sounds excessive.) Among the larger increases, Delaware's Highmark Blue Cross Blue Shield is asking for a 25% increase and Aetna is wanting a 16% increase in the same state. In Maryland, CareFirst BlueCross BlueShield is asking for an increase of 30%. Compared to these requests for rate increases, the one for Connecticut's HealthyCT at 14% doesn't sound too awful, and the article notes that last year this carrier decreased rates. So if that is the case, the average 2 year increase would be single digits. (Read more: NYT...seeking rate increases)
BlueCross BlueShield of Tennessee is citing the reason for their large increase request (36% on average) is that for every dollar they collected in premium, they said they paid out $1.14 in medical bills. They claim to have lost $141 million dollars on individual health policies sold on the exchange last year. Other companies who recently joined the marketplace are rethinking their strategy. Assurant did not have policies in 2014, but added plans in 2015. Due to the losses, they have announced they are looking for someone to buy their health business (to include the sale of health, dental and ancillary products as well.) If they cannot find a buyer, they will cease to sell policies in 2016. And last week there were rumors of a take-over/Sale of Humana albeit because they are cash flush with a growing Medicare book of business. Analysts on wall street believe we will see more mergers amongst health insurance carriers.
Double-digit increases, consolidation of carriers and fewer choices for consumers...was this the intention of the law? I'm sure you know the answer to that. The real question is can Congress tweak this law so it is workable, affordable for consumers and insurance carriers, and provides lots of choice for the American public? I guess we will just have to wait and see!