More on Reimbursement

Double digits: Some individual plans seek steep rate hikes

With little more than a year of claims experience on the new individual market, some insurers are looking for premium increases of more 30 percent, including the Blues. Though affordability is still relative.

BlueCross BlueShield of Tennessee is proposing a 36 percent average premium increase for its 222,000-person individual membership on and off exchange, with the increases ranging from 19.5 percent to 59.5 percent in one plan.

The Chattanooga-based nonprofit insurer sold individual public exchange plans to about 164,000 Tennesseans, about two-thirds of the state marketplace enrollment this year, along with another 56,000 off-exchange.

BCBST started out the first year of the ACA exchange attracting more than 80 percent of the enrollment, selling plans with some of the state's most affordable premiums, including the lowest-priced silver plans in the Knoxville and Chattanooga regions, with premiums of $180 a month for a 40-year-old.

Premiums increased for 2015, though BCBST was still among the lower-priced. The insurer's average silver plan premiums for a 50-year-old were priced at around $360. That's higher than the average prices from the Community Health Alliance co-op ($309) and Humana ($339), but lower than Cigna ($419) and Assurant ($505).

"Now with more demographic data and one full year of claims to analyze, we're able to more accurately price marketplace plans," said Mary Danielson, BCBST's director of corporate communications. "Our filing is planned to allow us to operate on at least a break-even basis for these plans, meaning that the rate would cover only medical services and expenses, with no profit margin for 2016."

Currently, BCBST's individual membership has an unsustainable medical cost ratio of 114 percent. That should be offset partially by the ACA's risk stabilization programs, but the exchange population is still coming with individuals who have a lot of healthcare needs, and low-risk individuals aren't signing up in a critical mass--at least not on BCBST plans.

"The number of young, healthy Tennesseans purchasing Marketplace plans was less than projected to balance the risk pool," Danielson said. "Many Marketplace plan purchasers were much less healthy than expected and the resulting medical care exceeded projections for this group."

The new individual market is a competitive one for BCBST, despite or perhaps because it has more than a 50 percent share of Tennessee's combined health insurance market. "Even with this increase, we expect our premiums for 2016 to continue to be a very competitive option for consumers," Danielson said.

Other insurers in Tennessee are seeking rate hikes for individual plans, although BCBST's are among the highest increases and there are also a few unknowns.

Cigna is seeking an average increase of 0.4 percent for its plans, some being reduced by 14 percent and some being increased 30 percent. Humana is seeking a 15.8 percent average increase, ranging from 4.3 percent to 21 percent.

Community Health Alliance has yet to file its rates; earlier this year, the co-op had its enrollment frozen by state regulators as a "preventive measure." Then there is Assurant Health, selling under Time Insurance Company in Tennessee, a part of the 41-state individual insurer now on the auction block and possibly facing closure.

News of health insurance premium increases is coming out across the country around Memorial Day and July 4th.

So far, rate increases for the individual exchange plans are running in the high single digits well into 20 percent. Oregon insurers are proposing on average rate increases of 23 percent, while the average increase in Connecticut is a little more than 7 percent.

In Maryland, greater Washington D.C.'s largest insurer, CareFirst BlueCross BlueShield, is seeking an average premium price increase of 28 percent for individual health plans in 2016.

CareFirst is seeking a 26 percent increase for its BlueChoice PPO and a 30 percent increase for CareFirst of Maryland and Group Hospitalization and Medical Services. If the increase is approved, the BlueChoice PPO will be in among the more expensive silver plans, and the GHMS PPO will be the highest priced.

Other insurers in Maryland are proposing reductions and increases. "It's important to remember that these rates are what companies have requested, and not necessarily what will be approved," said Maryland Insurance Commissioner Al Redmer. "There will be a thorough review of all the filings. As in years past, we may require changes."

(Source: Maryland Insurance Administration.)