- Associated Press - Wednesday, June 3, 2015

FRANKFORT, Ky. (AP) - Most health insurance companies want to raise prices on Kentucky’s health exchange next year, and some companies are blaming the Affordable Care Act for the higher costs.

The Kentucky Department of Insurance posted rate requests from the state’s major insurance carriers on Wednesday. The increases cover plans sold to individuals. It does not include large plans offered by employers.

The largest proposed increase was an average of 25.1 percent for the Kentucky Health Cooperative, the nonprofit that started with the help of a $58.8 million federal loan. It has sold the most private plans of any health insurance company on kynect. The proposed increase comes after the company raised rates by nearly 20 percent this year and received another $65 million federal loan to help it stay afloat.

Kentucky’s exchange, called kynect, is an online marketplace where people who meet certain income requirements can purchase private health insurance plans at a discount with the help of the federal government. It has given people access to health insurance who could not have afforded it otherwise. But many of those people already have health problems or are at a higher risk for health problems, so it costs more to insure them. The Affordable Care Act included a program that compensated insurance companies for these high risk customers, allowing them to keep offer lower rates. But that money goes away next year.

Kentucky Health Cooperative board chairman Joe Smith noted the Louisville-based company had projected to sign up 31,000 people in the first year. Instead, they now insure 55,000 people. He said the company was the only one to offer a platinum plan, where 90 percent of the policy is covered by the company.

“From the get-go, we have attracted a costlier, sicker population. People with more health care needs cost more to serve,” Smith said.

Smith said most insurance carriers have requested double digit premium increases. Anthem Blue Cross and Blue Shield cut its rates 4.3 percent this year following its first year selling insurance on the exchange. But next year, the company wants to raise rates an average of 14.6 percent for its individual customers. Anthem spokesman Mark Robinson said ending the high risk program, along with other factors including the rising costs of prescription drugs, contributed to the increased rate request.

“That means any carrier can be more at risk based on whoever happens to buy their insurance on the open market,” he said.

The proposed rates must still be approved by state regulators. They represent averages of all the plans a company offers. Individual rates vary based on factors like where people live, their age and whether they smoke. State officials said kynect offers approximately 70,000 different rates.

Democratic Gov. Steve Beshear noted kynect will have new companies selling on the exchange for the first time next year, including UnitedHealthcare, Bluegrass Family Health and Aetna Health.

“That means more competition and more choice for consumers, which is good news,” Beshear said. “Other plans may have made improvements since last year, such as expanded networks, that may make them more attractive to Kentucky families.”

Beshear has embraced the Affordable Care Act, and Kentucky’s success in implementing its exchange has been hailed as a national model by President Barack Obama. But the state’s conservative congressional delegation is trying to repeal the law, led by Senate Majority Leader Mitch McConnell.

“President Obama and his fellow Democrats promised that Obamacare would reduce premiums. Instead, we’ve learned that Obamacare plans in Kentucky may soon see double-digit premium increases - and for the second year in a row, in some instances,” McConnell said. “It’s time for this unworkable law to be repealed.”

A spokeswoman for Humana, which asked for an average increase of 5.2 percent, said exchange customers would see “only a modest average increase in premiums.” And not all rates are increasing. WellCare, which is in its first year of selling plans on the exchange, has asked to cut rates by an average of 9.28 percent. They are the only company to ask for a decrease. Off the exchange, Golden Life Insurance Company asked for an average increase of 11.5 percent while Celtic Insurance Company asked for a 9.93 percent increase.

Beshear said rates should be finalized by the middle of July.

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