Insurers seek sizable rate increases on Affordable Care Act health plans
Posted June 1, 2015
Chapel Hill, N.C. — Blue Cross Blue Shield of North Carolina has asked state regulators for a 25.7 percent average rate increase on individual insurance plans purchased under the Affordable Care Act for 2016.
The request, which still needs to be approved by the North Carolina Department of Insurance, doesn't include employer-sponsored health plans or to any existing coverage grandfathered in under the federal health care law.
Two other insurers, Coventry Health Care of the Carolinas and United Healthcare, also offer plans through the HealthCare.gov marketplace to North Carolina residents. Coventry, which is merging with Aetna, has asked for an average 18 percent increase, while United submitted a request for an average 12.5 percent increase.
Blue Cross Vice President and Chief Actuary Patrick Getzen said more than 325,000 people statewide enrolled in the insurer's plans offered on the HealthCare.gov marketplace for 2015. Although the demographics are similar to those who enrolled in 2014, he said, the current group of clients has more chronic health conditions, such as cancer, heart disease and diabetes.
Those conditions drove more consumption of costly medical services, such as hospital admissions, MRIs, CT scans, ultrasounds and specialty prescriptions, Getzen said. Enrollees also are visiting hospital emergency rooms more than expected – the health care law was designed to provide coverage to more people so they wouldn't resort to an ER visit for routine care.
Higher premiums would help offset the growing cost of medical services, he said, noting the Blue Cross could revise its request in the next month or so and seek an even larger increase. The company based its current request on 2014 data and wants to collect more information on 2015 costs before deciding on amending its filings with state regulators.
The Affordable Care Act requires that insurers spend at least 80 cents of every premium dollar directly on health care. Blue Cross officials have said the company spends 86 cents of every dollar on care.
Rates for Blue Cross plans on HealthCare.gov increase by an average of 13.5 percent this year.
Getzen also noted that 15 to 20 percent of customers with HealthCare.gov plans canceled their coverage after paying initial premiums and consuming costly medical services.
For the first time next year, Humana plans to offer health plans through the marketplace in North Carolina. But its coverage will be limited to residents in Davidson, Forsyth, Mecklenburg and Rowan counties.