Dive Brief:
- Major insurers are saying that the first group of ACA enrollees includes a higher rate of older, more expensive members than anticipated, so they will have to raise premiums next year.
- For example, WellPoint CEO Joe Swedish said he expects his company to make double-digit increases in exchange plans next year, though enrollment matched his expectations.
- In some cases, however, states are confident they can avoid sharp rate increases as a result of successful exchange enrollment. For example, California leaders believe insurers looking at current enrollment will probably have single digit increases in mind for next year.
Dive Insight:
Announcements by WellPoint and other insurers that anticipate double digit increases in premiums for exchange products has surprised some industry analysts, who expected increases similar to the medical trend. (The fourth quarter of 2013 saw medical spending rise by 5.6%). While the insurance companies have to cover their risks, they aren't doing much to attract healthy consumers if the product is priced entirely to cover the chronically ill. We'll just have to see how that shakes out next year.