Tags: Health Topics | Healthcare Reform | Obamacare | rate | hikes | insurers | high

Older, Sicker ACA Patients Lead Insurers to Seek Big 2016 Rate Hikes

By    |   Thursday, 21 May 2015 11:16 PM

High medical costs from relatively small numbers of very ill enrollees to Obamacare are leading large insurance companies to ask regulators in some states to raise their rates by more than 50 percent next year.

In New Mexico, for instance, Health Care Service Corp. is seeking an average jump of 51.6 percent, The Wall Street Journal reports. BlueCross BlueShield of Tennessee has sought an average raise of 36.3 percent, while CareFirst BlueCross BlueShield in Maryland has asked for a 30.4 percent increase.

Story continues below video.



"This year, health plans have a full year of claims data to understand the health needs of the [health insurance] exchange population, and these enrollees are generally older and often managing multiple chronic conditions," Clare Krusing, a spokeswoman for the Washington-based industry group America’s Health Insurance Plans, told the Journal.

"Premiums reflect the rising cost of providing care to individuals and families, and the explosion in prescription and specialty drug prices is a significant factor," she said.

The requests confirm a general premise of the Affordable Care Act: Older, sicker patients were more likely to sign up for plans — and this was, in theory, to be balanced by heavy participation by younger adults.

But attracting the younger, healthier people to Obamacare has proved challenging.

Obamacare requires insurance companies to file proposed rates with state regulators and to the federal government in most cases, the Journal reports. Some states are releasing the data to the public, as requests are to be reviewed in the coming weeks.

The Obama administration is expected to release its filings early next month, the Journal says.

The Journal's report was based on a review of public filings by large insurers with regulators in a dozen states.

However, many state regulators can require insurers to cut back unjustified requests, according to the report. And the Obama administration can ask insurers to explain why they are seeking increases of 10 percent or more, though they cannot force rate cuts.

Rates will become final by the fall.

"After state and consumer rate review, final rates often decrease significantly," Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, the federal agency that administers Obamacare, told the Journal.

But consumer groups are demanding stronger review of rate requests.

"We are really wanting to see very vigorous scrutiny," Cheryl Fish-Parcham, director of the private insurance program at Families USA, told the Journal. The Washington-based group backs Obamacare.

The proposed rates reflect the revenue needed to pay claims, according to the filings. Obamacare requires that companies offer the same rates to everyone, despite their medical history.

For instance, BlueCross BlueShield of Tennessee and CareFirst in Maryland told regulators that high medical claims from Obamacare plans caused them to seek the higher rates, the Journal reports.

BlueCross BlueShield said it had lost $141 million from plans sold on the Obamacare exchange — mostly because of a small number of sick enrollees.

"Our filing is planned to allow us to operate on at least a break-even basis for these plans, meaning that the rate would cover only medical services and expenses — with no profit margin for 2016," spokeswoman Mary Danielson told the Journal.

Under the proposed increases, BlueCross BlueShield's lowest monthly premium for a mid-range, or "silver" plan, for a 40-year-old nonsmoker in Nashville would rise from $220 to $287 next year, according to the report.

Tennessee Insurance Commissioner Julie Mix McPeak, however, said she would be "surprised if we settled on 36.3 percent," which is the company's average rate increase.

A significant boost, however, might be allowed, McPeak told the Journal. The data her team evaluated reflected large costs on medical claims, she said.

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
Newsfront
High medical costs from relatively small numbers of very ill enrollees to Obamacare are leading large insurance companies to ask regulators in some states to raise their rates by more than 50 percent next year.
Obamacare, rate, hikes, insurers, high, costs, older, sicker, patients
610
2015-16-21
Thursday, 21 May 2015 11:16 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved