- The Washington Times - Tuesday, June 2, 2015

Insurers are planning double-digit rate hikes ahead of Obamacare’s third year, eliciting a told-you-so outcry from the law’s opponents who said the health law is to blame for boosting the price of care and forcing those costs onto consumers.

A major insurer in New Mexico is seeking a 50-percent rate increase for 2016, one in Tennessee wants to raise its premiums for a mid-level silver plan by 36 percent, and proposed hikes in Illinois range from about 13 percent to well above 30 percent in some cases, according to data published this week.

The figures, posted on the federal HealthCare.gov website, offer a glimpse at how insurers are responding to the 2010 overhaul, now that they’ve had more time to evaluate the type of risk they’re taking on under Affordable Care Act.

Insurers said the proliferation of costly, specialized drugs and the phasing out of reinsurance payments — a transitional program that helps insurers cover high-cost enrollees — are driving up their rates.

And some insurers said they’re discovering customers are sicker than they expected.

Maryland insurance giant CareFirst BlueChoice is seeking 28-percent rate increase, on average, for its products on the individual market — a spike that “directly reflects the cost of providing care to the somewhat older individuals and those with more chronic medical conditions who purchased policies from CareFirst,” according to company spokesman Michael Sullivan.

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“CareFirst has predicted for some time that rates would need to climb from artificially lower levels due to the characteristics and needs of the population that has actually enrolled,” he said.

In North Carolina, Blue Cross Blue Shield requested rate hikes of up to 26 percent, while Aetna is seeking 23 percent more for one of its on-exchange plans.

“The rates that we are filing simply reflect the costs of health care including the cost of services, the amount of services people will receive and an increase in pharmaceutical costs,” Aetna spokesman Walter Cherniak Jr. said.

The rate filings kick off a monthslong negotiation between insurers and state and federal regulators, who can move to tamp down the prices before the next enrollment period.

“These specific rates will be subject to vigorous rate review and revision and the final rates consumers will see this fall will reflect the breadth of choice and competition in the marketplace,” said Andy Slavitt, administrator for the Centers for Medicare and Medicaid Services.

Congressional Republicans, though, said the requests alone amount to another broken promise under the 2010 health law, saying that the younger customers President Obama had hoped to entice into the market to spread risk around haven’t signed up.

“Younger, healthier people realize Obamacare is a rotten deal for them and they are making a rational calculation not to purchase insurance,” said Emily Schillinger, a spokeswoman for Sen. John Barrasso, Wyoming Republican, said.

Policy analysts said that the plans with big increases may not be the best way to judge the health of Obamacare, however. They pointed to the most popular plans, where insurers are seeking more modest increases as they continually take stock of the people signing up.

Overall, plans seem to be nudging their rates a few points higher than last year, said Gary Claxton, a vice president at the Kaiser Family Foundation, a prominent health policy organization.

“Some have concluded they are sicker than who they thought they would cover,” he said, noting that insurers are still feeling their way under Obamacare. “We’re still in this case where things haven’t completely settled down yet.”

The prospect of higher premiums is just the latest skirmish over Obamacare, which faces a major test before the Supreme Court.

Before this month ends, the justices will decide whether the IRS has been illegally paying subsidies to people who bought exchange plans in at least 34 states. The ruling could invalidate subsidies that 6.4 million American rely on to afford coverage this year, according to updated figures released Tuesday.

Some insurers warn they will scrap their rate proposals and start over if the court strikes down the subsidies, since healthier customers would likely drop their coverage first and send insurers’ costs soaring.

Humana, a major insurer based in Louisville, Kentucky, said in a rate filing with Michigan’s insurance department that it assumes federal subsidies will not be “significantly impacted” by the court’s decision.

“To the extent that this assumption does not prove to be correct,” it said, “a revision to our rates may be required to ensure adequacy.”



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