Morning Briefing
Summaries of health policy coverage from major news organizations
Higher Rate Requests Come As Insurers Wrestle With Effects Of Health Law
Around the country, major health insurers are proposing to increase monthly premiums by 26 percent to 51 percent. This, predictably, has reignited the political debate over the Affordable Care Act. But there’s something more important going on, and it’s happening in the belly of the insurance industry. Insurers are grappling with new rules to bring price stability to their businesses. (Gorenstein, 6/2)
Under the Affordable Care Act, insurers are required to make public any rate proposals that increase by at least 10 percent on the federal government’s website. Though premium rates vary significantly depending on the region, major carriers including UnitedHealthcare, Athena and Blue Cross Blue Shield have proposed rate increases for next year between 10 and 30 percent in a handful of states. ... Some are even higher. ... Insurers attribute the higher rates to the rising cost of prescription drugs as well as their added costs from new consumers enrolled under the law’s health exchanges. ... This is the first year that insurers actually have data on the ACA’s new enrollees—including how healthy or sick they are and how they affect the risk pools. Before this year, insurers were essentially playing a guessing game when setting premium rates for 2014 and 2015, and because of that, many were optimistic and set rates too low. (Ehley, 6/2)
Insurers say they want to hike rates because enrollees are going to the doctor, getting lab work and filling prescriptions more than they had originally anticipated. "We've seen a great pent-up demand for services," said Aaron Billger, spokesman for Highmark, a Blue Cross Blue Shield licensee offering plans in Pennsylvania, Delaware and West Virginia. Enrollees in Obamacare exchange plans use more healthcare than those in job-based policies, he noted. (Luhby, 6/2)
The preliminary requests were announced as the Supreme Court prepares to rule on the validity of ObamaCare’s tax credits to offset the cost of premiums for lower-income consumers in most states in the country. Individual health insurance policies are a relatively small slice of the overall market. Many more people are insured through an employer. And it is not clear whether any of these preliminary rate hikes will stick. (6/2)
Several state news outlets looked at the proposals too -
Nearly a dozen health insurers are proposing double-digit rate increases for 2016 Florida plans sold on the exchanges created under Obamacare as well as individual coverage sold through brokers and agents. One of Aetna Health Inc.'s plans requested a 21 percent hike, and plans for United Health Care of Florida and Coventry Health Care of Florida were looking for increases of 18 percent. United requested a 31 percent increase in one of its plans sold off the exchange, according to preliminary rate information released Monday on the federal government's HealthCare.gov website. (6/2)
Many Georgians could face double-digit increases in their health insurance premiums next year, based on initial rates sought by insurers. Insurers’ requests in Georgia range as high as a 64.2 percent increase for a Time Insurance Co. plan for individual coverage starting in January. But most of the double-digit increases being requested in the state are in the range of 10 percent to 20 percent. (Miller, 6/2)
Meanwhile, the Los Angeles Times offers this take on Medicare and health care costs -
A short drive in the Los Angeles area can yield big differences in price for knee or hip replacement surgery. New Medicare data show that Inglewood's Centinela Hospital Medical Center billed the federal program $237,063, on average, for joint replacement surgery in 2013. That was the highest charge nationwide. And it's six times what Kaiser Permanente billed Medicare eight miles away at its West L.A. hospital. Kaiser billed $39,059, on average, and Medicare paid $12,457. (Terhune and Poindexter, 6/2)
