Some Obamacare insurers want massive premium hikes
A debate over Obamacare premiums is likely to heat up, with several health insurers proposing to boost rates by as much as 51 percent in 2016.
While some insurers are asking for sizable premium increases, it's not certain that state and federal authorities will approve the increases. In some cases, insurance regulators will be able to ask insurers to pare back premium increases, and the Obama administration can ask carriers asking to boost rates by more than 10 percent to explain their rationale, according to The Wall Street Journal.
The reasons for the proposed rate hikes, which vary by state and insurer, come down to two issues: sicker patients and higher costs for pharmaceuticals, such as the expensive hepatitis C treatment Sovaldi. According to The Journal, which reviewed public filings in a dozen states, the highest proposed rate increase comes from New Mexico, where Health Care Service Corp. is asking for an average hike of 51.6 percent in premiums next year.
Other increases are sizable, but not quite as hefty. BlueCross BlueShield of Tennessee wants an average increase of 36.3 percent, while CareFirst BlueCross BlueShield in Maryland is proposing a hike of 30.4 percent. One plan in Oregon, Moda Health, wants an average premium hike of 25 percent. The insurers all cited higher medical costs from new patients enrolled through Obamacare, The Journal noted.
In South Dakota, Wellmark BlueCross and BlueShield is asking for a 43 percent premium hike, after the number of claims that exceeded $50,000 exceeded its initial forecast by 31 percent, according to Keloland Television.
"This double digit percent increase in large claims, on top of how we expected folks to use these policies was really quite shocking to us," Laura Jackson, an executive for Wellmark, told the television station.
While the 2010 Affordable Care Act was designed to offer affordable health-care insurance through state and federally run marketplaces, much of the plan was based on getting a significant share of younger, healthier Americans signed up. That would help offset the expense of treating older or sicker patients.
Although slightly more than one-quarter of initial enrollees in the program were between 18 to 34, insurers were dealing with a largely unknown customer base, such as whether they were sicker than the overall population or if some had deferred health care for years.
Tennessee's BlueCross BlueShield told The Journal that it lost $141 million from the plans it sold through the ACA, thanks to a small group of sick customers. It's asking to boost the rate for its "silver" plan for a 40-year-old nonsmoker in Nashville by 30 percent to $287 a month next year.
Still, not every state will be facing hefty increases. The top insurer in Vermont, for instance, is asking for an 8.4 percent increase, while Maine's top carrier is proposing to keep rates flat.