Tags: Healthcare Reform | obamacare | rate | increase | healthcare | insurance

Health Insurers Seek 54 Percent Obamacare Rate Hikes

By    |   Saturday, 04 July 2015 11:27 AM

Americans covered under Obamacare are turning out to be sicker than expected, and health insurance companies are calling for dramatic rate increases — as much as 54 percent — to help meet the costs.

Blue Cross and Blue Shield, the market leaders in most states, wants to drive up rates by 54 percent in Minnesota, 36 percent in Tennessee, and 31 percent in Oklahoma, just a few of the states where documents filed online show higher rates are being sought, reports The New York Times.

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Heath and Human Services Secretary Sylvia Mathews Burwell told The Times that subsidies will help soften the blow of the rate increases, as 85 percent of the people who obtain coverage through federal and state marketplaces use tax credits to help pay premiums.

She also urged customers to try to find less expensive plans during the upcoming open enrollment period, which will start in November, as there is "a marketplace where there is competition, and people can shop for the plan that best meets their needs in terms of quality and price.”

In Oregon, Insurance Commissioner Laura Cali has already approved the rate increases for 2016, with Moda Health Plan, the largest insurer, to be allowed to raise their premiums by 25 percent and the next largest, LifeWise, has received a 33 percent increase.

"Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here," said Jesse Ellis O’Brien, a health advocate at the Oregon State Public Interest Research Group. "Some may start wondering if insurance is affordable or if it’s worth the money.”

President Barack Obama called on consumers to pressure state insurance regulators to scrutinize rate increase proposals, and he expects many will end up being "significantly lower" than the companies want.

According to the Kaiser Family Foundation, consumers would see just modest increases in their premiums if they are willing to switch plans. However, many of those lower-priced plans also come with limits on doctors, hospitals, and medical services and care.

In Texas, where the Scott & White Health Plan is seeking a 32-percent rate increase, company chief executive Marinan Williams told The Times the rate raise requests show there has been a "real need for the Affordable Care Act," and shows that Americans are using their insurance to get services they delayed when they didn't have insurance.

"There was a pent­-up demand," Williams said. "Over the next three years, I hope, rates will start to stabilize.”

In their requests, insurers are also citing other reasons for their requests, including the high cost of specialty drugs and the Obama administration's decision in late 2013 that allowed some people to keep insurance plans that did not meet federal standards. This meant fewer people than expected signed up for insurance through federal and state exchanges.

Claims costs were also underestimated. Arches Health Plan, which covers about a quarter of the people who bought their plans through the federal exchange in Utah, collected premiums of $39.7 million,  had claims of $56.3 million in 2014, and has requested a 45 percent in rate increase.

And in some cases, insurers said in financial statements that while federal standards require companies' payments to consumer health to total about 80 percent of the money that is brought in through premiums, in many cases the totals were over 100 percent, a rate that they cannot afford.

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Americans covered under Obamacare are turning out to be sicker than expected, and health insurance companies are calling for dramatic rate increases - as much as 54 percent - to help meet the costs.
obamacare, rate, increase, healthcare, insurance
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2015-27-04
Saturday, 04 July 2015 11:27 AM
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