State insurance regulators across the country have approved health care premium increases higher than those requested by insurers, despite a national effort to keep rates for policies sold on
In eight states, regulators approved premiums that were a percentage point or more higher than carriers wanted, said Charles Gaba, a health data expert at ACASignups.net who analyzed the rates for USA TODAY. As of Tuesday, those states are Arizona, Pennsylvania, Colorado, Florida, Georgia, Kansas, Minnesota and Utah.
Pennsylvania regulators approved individual plan rate increases Monday of 33%, which is eight points higher than requested. Two insurers — Keystone Health Plan and Geisinger Quality Option — will also no longer offer plans on the ACA exchange for the state.
"These rate increases make it clear that Washington needs to move swiftly to address consumer needs under the Affordable Care Act," Pennsylvania insurance commissioner
But Gaba doesn't think it's as bad as it appears.
“To consumers, this seems terrible like, ‘Oh, they’re price gouging us,’ ” Gaba said. “But part of regulators’ jobs is to keep insurance companies solvent so they can continue to give people insurance.”
Gaba's analysis of rates for the individual insurance market includes some of his own projections based on available data It also weights the averages of different insurers' rate increases, based on their relative market share. The averages also assume that all of those now insured renew their existing policies and doesn't include new policies since there’s no earlier rates with which to compare those.
This market now covers about 18 million people who don't get their insurance through work, Medicare, Medicaid or the Department of Veterans Affairs. About half of these people get some subsidies to pay for insurance.
This year may be the last for dramatic premium increases as insurers now understand their new markets better, say some supporters of the law, including the head of the
In fact, this year many insurance carriers have requested premium rate increases that are closer to what regulators think are appropriate, says Gaba.
“Ideally you want what’s requested to be what’s necessary,” he added. “And that was part of what happened.”
Insurer withdrawals from some markets and rate hikes of more than 50% in some areas prompted fears that some insurance marketplaces were at risk of collapsing.
Carriers that have raised premiums significantly include
But there are some insurers with premiums that had big drops, including Medical Health Insurance of Ohio, which cut them by about 17%.
“The business was underpriced in many markets in the first couple years,” says
Insurance regulators are also trying to keep insurance affordable by petitioning lawmakers to revamp Obamacare. That’s what Al Redmer Jr., Maryland's insurance commissioner, was fighting for when he testified before the House Committee on Oversight and Government Reform in mid-September. The premium approval process is more transparent than ever, Redmer said in his testimony, but health care still isn’t getting more affordable.
Part of the problem is how uncertain the health care market is for carriers, Redmer said. Carriers bring proposed rates to state regulators in May, but the numbers they produce have to cover the rest of the year. That means insurers have to scramble to get numbers that will project what their expenses will be for the next year.
“You’re projecting your chances a year and a half in advance. That’s difficult enough, but when you know the federal government will change their rules multiples times within that 18 months that creates more uncertainty,” Redmer said.
Gaba's analysis also showed that regulators approved rates that were lower than requested in 12 of the 40 states plus
Some of the lowest income people are struggling in states where many others who are eligible for minimal or no subsidies are also hard hit. A
It isn't a sure-fire way to keep premiums low, however, Minnesota, where premiums have risen an average of about 57%, expanded Medicaid in 2014.
That's hit Minnesota meeting planner Kathryn Barker hard. She has been paying for her own insurance for 25 years and saw her premiums nearly double on her Blue Cross Blue Shield (BCBS) plan from $360 before the ACA exchanges opened to $600 a month today. She calls that "anything but affordable" and now faces the possibility of paying more with BCBS' withdrawal from the individual insurance market in her state.
Barker's income can fluctuate considerably, but she is eligible for tax credits and possibly subsidies to reduce her share of health costs. The
Before the ACA, insurers could decline to insure people who had preexisting conditions so many of the first people to sign up on the exchanges were those who couldn’t get insurance before.
“Nobody really knew what it would cost to insure sick people,” Slavitt said. “I don’t know how (anyone) could have known.”