Most Exchange Plans Will Not See Double-Digit Rate Hikes in 2016
While some consumers will see double-digit premium increases for exchange plans in 2016, most likely will see smaller increases, according to an analysis by the Kaiser Family Foundation, National Journal reports (Owens, National Journal, 6/24).
The Obama administration earlier this month released insurers' proposed rates for 2016 health plan premiums on HealthCare.gov. Many health insurers proposed premium hikes greater than 10% for individual plans, citing higher-than-expected care costs and other unexpected expenses. However, the proposed rates vary significantly across states and health plans. The premium increases would apply to plans sold through both the Affordable Care Act's federal exchange and the private insurance market (California Healthline, 6/2).
Double-Digit Hikes the Exception
Critics of the ACA in recent weeks have said the law is to blame for the large increases.
However, the KFF analysis suggests that those large rate increases could be the exception. The analysis found that preliminary premiums for 2016 benchmark silver plans increase by 4.4% in large metropolitan areas in 10 states and Washington, D.C. Meanwhile, a separate Avalere Health analysis released this month projected that silver exchange plans would increase by 5.8% in eight states.
According to National Journal, those rates are much lower than what some expected but higher than the 2% rate increase seen nationwide last year (National Journal, 6/24).
House Subcommittee Reviews Insurance Costs
In related news, state insurance commissioners during a House Ways and Means subcommittee hearing on Wednesday told lawmakers that while some states are dealing with higher insurance costs for consumers because of the ACA, others have seen record-low proposed premium rate increases, the Wall Street Journal reports.
The hearing came as insurers work to set their 2016 premiums and just before the Supreme Court ruled to uphold subsidies to help U.S. residents purchase coverage through the federal exchange.
For more information on the Supreme Court's ruling, see today's top story.
During the hearing, Tennessee Department of Commerce and Insurance Commissioner Julie Mix McPeak said the ACA has led to higher costs as the result of less competition. McPeak said, "The ACA's strict underwriting and business requirements have left carriers with few options to consider to maintain or reduce costs."
Meanwhile, Rep. Peter Roskam (R-Ill.), chair of the subcommittee, said, "Many of the proposed increases are eye-poppingly huge," adding, "Health care costs and health insurance premiums are still going up."
However, Washington state Insurance Commissioner Mike Kreidler said that insurers in the state have proposed record-low rate increases, with an average of 5.4%. He said, "Premiums are not soaring" (Armour, Wall Street Journal, 6/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.