Oct. 17--Insurers seeking rate increases for their 2017 Affordable Care Act health plan offerings got that and sometimes much more, as the Pennsylvania Insurance Department revealed approved rates Monday, two weeks before the Nov. 1 start of the annual open enrollment period.
Overall, approved rates for individual and small group marketplace plans submitted by insurers and the increases average an eye-popping 32.5 percent for individual plans and 7.1 percent for small group plans.
A breakdown of the approved rates can be viewed online at http://www.insurance.pa.gov/Consumers/HealthInsuranceFilings/Pages/default.aspx
"Making sure the public is aware of these increases now is important to give consumers the time they need to make the best healthcare decision for both themselves and their families," said Teresa Miller, Pennsylvania Insurance Department commissioner, in a statement.
In some instances, the state has approved higher increases than insurers requested.
For one individual marketplace plan, Highmark asked for a 48.1 percent increase and the state approved a 55.07 percent increase; for another, Highmark's 38.4 percent increase has been bumped up to 45.42 percent by the state.
UPMC Health Plan, meanwhile, had requested a 6.5 percent increase for its ACA plan and received approval for a 9.3 percent increase.
Jonathan Gold, spokesman for the U.S. Department of Human Services, said Monday that "the overwhelmingly majority of consumers will not be paying these increases."
Rather, most marketplace consumers "will be able to select a plan for less than $75 per month," he said.
"Headline rate changes do not reflect what these consumers actually pay because tax credits reduce the cost of coverage below the sticker price and shopping helps consumers find the best deal," he said. "Meanwhile, for the 60 percent of people in Pennsylvania with employer coverage, premiums have grown at some of the slowest rates on record since the Affordable Care Act was enacted."
The approved rate increases are apparently an attempt to keep insurers in the marketplace after many, including Pittsburgh-based Highmark Inc., suffered multi-million dollar losses in the first rounds. Major insurers such as Aetna have since pulled out of the marketplace and United HealthCare has also cut back its offerings.
"Given these difficulties, the department worked with insurers to make sure they continue to view Pennsylvania as a state in which they want to offer coverage through the exchange," wrote the state insurance department in explaining why it approved the 55.07 percent increase on the Highmark plan.
"In approving rates for 2017, the department focused on making sure that Pennsylvanians in every county in the state continue to have access to health plans through the exchange."
The insurance department also noted, however, that it hopes "this rate increase represents a one-time correction to previous underpricing, and that in future years insurers will not need rate increases significantly above standard increases in medical costs."
Highmark, which has reaffirmed its commitment to continue offering marketplace plans, says losses on its marketplace products have exceeded $800 million since 2014, as the cost of treating enrollees outpaced revenue from premiums.
Highmark officials also have filed suit against the federal government to collect more than $220 million that the insurer says it is owed just for 2014 under the "risk corridor" provision of the Affordable Care Act meant to act as a backstop against insurer losses in the early years of the exchange.
Today, Ms. Miller said the department wants to file an amicus brief supporting Highmark in its lawsuit, saying, "Washington's refusal to live up to the law it passed and fund risk corridor payments to insurers that incurred higher claims than expected has led to large insurer losses and companies leaving the exchange."
Pittsburgh-based UPMC Health Plan has been a notable exception to those hit with major losses as officials there have said their products were not priced based on an assumption they would receive the risk corridor payments.
The open enrollment period runs from Nov. 1 through Jan. 31.
Steve Twedt: email@example.com or 412-263-1963.
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