‘Obamacare’ rate hikes: What you should know
Ken Alltucker, The Republic | azcentral.com11:28 a.m. MST June 13, 2016
(Photo: Getty Images/iStockphoto)
- Two health insurers are seek rate hikes of more than 60 percent.
- The preliminary rate increases will be reviewed by the Arizona Department of Insurance.
Arizona health insurers that sell Affordable Care Act plans next year will seek some of the largest rate increases since the marketplace launched in 2014.
The average rate ask for one insurer is nearly 65 percent, but the amount consumers actually will pay depends on factors such as age and income and how much state regulators allow insurers to raise rates.
Blue Cross Blue Shield of Arizona has requested the state’s largest average rate hike, 64.9 percent, for a marketplace plan. The Phoenix-based health insurer is the only provider that has filed documents to sell health plans in every Arizona county in 2017, and it could be the only marketplace option in eight mostly rural counties after UnitedHealthcare’s All Savers leaves the marketplace next year.
Phoenix Health Plans requested the second-highest average rate increase, 60.4 percent. Health Net of Arizona and Health Choice Insurance Co. have sought rate hikes of 29.1 percent and 28.1 percent, respectively.
Aetna has requested a rate increase of 18.3 percent, and Cigna has the lowest rate-increase request, 8.7 percent.
Rate requests aren’t the whole story
The state Department of Insurance and the Centers for Medicare and Medicaid Services released the preliminary information that includes percentage increases but not the underlying, average monthly rates that insurers seek to charge.
Health-law advocates point out that rate requests often have little to do with how much most people pay for health plans purchased through the federal marketplace. About three of four Arizonans who bought marketplace plans this year received a tax credit that offset the cost of their monthly premiums.
So, even though health insurers requested increases of up to 27 percent, the average monthly premium for Arizonans this year decreased by $3, to $120 per month, according to a U.S. Department of Health and Human Services report.
“The initial filings do not tell the whole story,” said Allen Gjersvig, the Arizona Alliance for Community Health Centers’ director of navigator and enrollment services. “It has to factor age, where you live in the state and whether somebody is eligible for tax credits.”
The marketplace plan rate increases do not apply to the vast majority of Arizonans who get health coverage through an employer or government health insurers such as Medicare, Medicaid or the U.S. Department of Veterans Affairs. A little over 135,000 Arizonans were enrolled in a marketplace plan as of Dec. 31.
The Department of Insurance must review rate increases sought by health insurers. It could determine if the rate asks are unreasonable and request insurers seek a smaller increase, said the department’s Erin Klug.
Marketplace options will narrow
Arizona’s marketplace options will narrow next year with UnitedHealthcare’s All Savers and Humana exiting Arizona’s Affordable Care Act marketplace for 2017. Both insurers have cited ongoing financial losses as the reason for discontinuing marketplace plans, though both companies will offer other types of health plans like Medicare and employer plans.
Blue Cross Blue Shield is only insurer that has filed to sell marketplace plans next year in the following eight counties: Cochise, Graham, Gila, Greenlee, La Paz, Santa Cruz, Yavapai and Yuma.
Six health insurers are expected to offer Affordable Care Act plans in Maricopa County. Pinal County will have two options: Blue Cross Blue Shield and Aetna.
Department of Insurance officials said insurance companies will have until Aug. 9 to add or eliminate service areas.
Insurer: Hikes needed to offset losses
Blue Cross Blue Shield officials said the insurer’s average rate ask of nearly 65 percent is needed to offset the insurer’s exorbitant losses during the first two years of the marketplace.
With a reported loss of $185 million on individual plans sold during the first two years of marketplace exchanges, Blue Cross Blue Shield said there aren’t enough people signing up for Arizona’s marketplace plans and paying monthly premiums to offset those losses.
The insurer said that it provided health coverage to 1.5 million Arizonans, but only 73,000 customers are enrolled an a marketplace plan. It seeks to raise rates on marketplace customers because those consumers tend to have higher medical costs due to serious health conditions and may not have had health coverage before. Also, increased costs of prescription drugs and medical services are factors in the rate ask.
Insurers were allowed to deny or exclude coverage based on existing health conditions before the Affordable Care Act marketplaces began in 2014, but the health-care law forbids insurers from using those tools to exclude coverage.
Blue Cross Blue Shield said that its newly insured marketplace customers are 2.5 times more likely to have diabetes or have a hospital stay compared with customers who were insured before that marketplace started in 2014.
Consumer advocates say that marketplace customers in metro Phoenix should scrutinize their health plans to choose coverage that fits them. That could depend on an insurer’s network of providers, deductibles, prescription-drug coverage.
“Arizona consumers who are subjects to a rate increase can shop around and save money by switching coverage,” said Diane Brown, executive director of Arizona Public Interest Research Group