More on Strategic Planning

Provider-sponsored plans hold back on price hikes, report shows

Though many for-profit payers continue to push for higher margins.

Screenshot from <a href=""></a>Screenshot from

Individual marketplace plans are in for huge rate increases next year, some fear, but the ACA markets so far suggest that many organizations, including provider-owned plans, are holding the line.

That's according to researchers with the Robert Wood Johnson Foundation and Urban Institute, who studied silver plan premiums in 73 rating areas across 30 states.

National for-profit insurers like Aetna and UnitedHealthcare entered many new state exchange markets for 2015, after sitting out some of their major state markets in 2014. Their health plans "continue to reflect an aversion to risk by having higher than average premiums," according to Linda Blumberg, John Holahan, and Erik Wengle.

[Also: Aetna buys Humana for $37 billion in largest-ever insurance merger]

Aetna is among those hoping for the ACA exchange markets to be "modestly profitable" in the years to come, although that comes with all kinds of uncertainties in regulations and the transition away from two temporary risk-sharing programs.

Humana is the exception to the high pricing trend among for-profit insurers, with the lowest premiums in Birmingham and Georgia, although that is also where the company attracted thousand of members with higher-than-expected utilization needs. 

Among the Blue Cross and Blue Shield insurers, many have kept exchange premiums relatively low, the study found. BCBS of Tennessee, BCBS of North Carolina and others attracted a large share of the new enrollees and have taken losses in the new plans.

Chart: Lowest Cost Silver Premium Pricing for Provider Sponsored Insurers (story continues below)

Region Health Plan 2014 Pricing 2015 Pricing Percent change
Region Health Plan 2014 Pricing 2015 Pricing Percent change
Phoenix University of Arizona Health Plans $325.00 $202.00 -37.85%
Tuscon University of Arizona Health Plans $290 $189 -34.83%
Los Angeles Kaiser Permanente $297 $287 -3.37%
San Francisco Kaiser Permanente $387 $393 1.55%
Rural California Kaiser Permanente $350 $356 1.71%
Denver Denver Health Medical Plan $275 $318 15.64%
Colorado Springs Kaiser Permanente $270 $257 -4.81%
Atlanta Kaiser Permanente $297 $323 8.75%
Indianapolis MDwise Marketplace $356 $365 2.53%
Baltimore Kaiser Permanente $270 $226 -16.30%
DC Suburbs Kaiser Permanente $270 $226 -16.30%
Detroit HAP $302 $266 -11.92%
Detroit Priority Health $313 $286 -8.63%
Detroit McLaren Health Plan $278 $296 6.47%
Albuquerque Presbyterian Health Plan $221 $227 2.71%
New Mexico Rural Presbyterian Health Plan $265 $273 3.02%
New York City NorthShoreLIJ $420 $394 -6.19%
Pittsburgh UPMC Health Plan $288 $170 -40.97%
Pennsylvania Rural Geisinger Health Plan $214 $243 13.55%
Pennsylvania Rural UPMC Health Plan $320 $228 -28.75%
Massachusetts Neighborhood Health Plan $296 $244 -17.57%
San Antonio CommunityFirst $386 $239 -38.08%
Richmond, Virginia Optima Health Plan $348 $377 8.33%
Virginia Beach Optima Health Plan $272 $285 4.78%
Virginia Rural Optima Health Plan $320 $346 8.13%
Virginia Rural Innovation Health Insurance Company $259 $282 8.88%

Some regional insurers have entered exchanges with fairly high premiums, like Harvard Pilgrim's 2015 foray into Maine's individual market, selling the highest premiums in Portland ($364 silver plan) and in the rural rating region ($404). "Many (regional insurers) appear to be struggling to remain price competitive," argued Blumberg and colleagues.

In New York City, the start-up Oscar Health was largely pitted against the locally-strong EmblemHealth, with both selling lower-priced plans among 10 insurers. Oscar sold the third-most affordable plan in 2014 at $385 for a silver plan, then in 2015 with rates raised 2 percent sold the sixth-most affordable, out of 12 insurer. Emblem raised them 6 percent, while MVP Health Care, Fidelis Care, Health First, UnitedHealthcare and North Shore-LIJ offered lower rates.

Provider-sponsored health plans have made a good showing with affordable exchange plans, the Urban Institute study found.

Like Healthcare Finance on Facebook

Selling lowest- and second-lowest priced plans have been Kaiser Permanente, INOVA Health System's Innovation plan, Providence Health & Services plan in Oregon and Sentara Healthcare's Optima Health in Virginia--although there are cautionary tales about growing a health plan so quick.

PreferredOne, a health plan owned by health systems in Minnesota, attracted 60 percent of state exchange enrollees in the first year with the lowest-priced plans, at $154 per month. The company bailed on the exchange market the next year, amid technology problems with the state marketplace and a surge of new members.

UPMC Health Plan started out with high priced plans in 2014, and then aimed to sell highly affordable products this year. In Pittsburgh, UPMC Health Plan silver plan premiums were the highest of three health insurers in 2014, at $288 per month, and then lowered 40 percent to $170, the most affordable of five insurers. In western Pennsylvania's rural rating area, UPMC Health Plan was the highest priced in 2014, at $320, almost $100 more than Geisinger Health Plan. In 2015, Geisinger increased rates 13 percent to $243, while UPMC lowered rates 32 percent to $228.

Twitter: @AnthonyBrino