Dive Brief:
- CareFirst, which sells the most popular plans on the Maryland health insurance exchange, has been approved to increase its 2016 rates by 26% for its PPO plan and another plan only offered in the Washington suburbs, and increase the rate for its HMO plan by 19.8%, state Insurance Commissioner Alfred W. Redmer Jr. announced last Friday.
- CareFirst insures three-fourths of Maryland residents who purchased health plans under the ACA.
- The announcement is the lastest in a string of disclosures from insurers in numerous states on what their premiums will be for 2016, as plans gear up for open enrollment to get underway Nov. 1.
Dive Insight:
CareFirst is the latest plan to raise its rates as a result of a sicker-than-expected pool of enrollees causing higher-than-expected expenses. The insurer reports it lost $100 million this year on its individual insurance policies, partly as a result of thousands of small businesses ending their insurance coverage and sending their employees to the health exchange.
CareFirst had requested even higher increases for 2016 but was held back by state regulators, writes The Baltimore Sun.
For a typical 40-year-old purchasing a CareFirst “silver” plan, the most common option, monthly premiums will reach $329 — a $75 increase over 2015, notes The Washington Post.
The insurer is taking heat from local healthcare advocates and gaining national attention from industry observers looking to gauge issues of affordability and sustainability under the federal healthcare law. Some critics suggest if subsidies don't compensate for the increases in premiums, too many enrollees will be priced out.