Dive Brief:
- More major insurers across the U.S. are seeking substantial rate increases, according to data released Monday by the Obama administration for the 37 states using the federal exchange. Blue Cross and Blue Shield of Illinois is seeking an increase of 29% or more, while PA-based Highmark Health is asking for a 30% jump.
- HHS only publishes proposals seeking rate increases of over 10%. But while Monday's release doesn't paint a complete picture, Dena Mendelsohn, a health policy analyst at Consumers Union noted that large insurers were among those asking for significant increases.
- The administration emphasized that these rates are the jumping-off point for negotiations, not the final number. "These specific rates will be subject to vigorous rate review and revision," said CMS acting administrator Andy Slavitt.
Dive Insight:
What's significant about this latest release is that major market players are the ones leading the charge—Bob Laszewski, at Health Policy and Strategy Associates, pointed to a trend of large insurers asking for 15% to 35% increases.
"The companies with the biggest market shares are raising rates, signaling they don't care if that causes them to lose enrollment," Laszewski told The Wall Street Journal. "This is not a good sign. These people are saying they don't care if they keep the business. They don't want it if it's not profitable."
It's still early in the game, however—and by virtue of being only increases over 10%, this is a very skewed group of numbers. "Trying to gauge the average premium hike from just the biggest increases is like measuring the average height of the public by looking at N.B.A. players," noted Kaiser Family Foundation's Larry Levitt.
Insurers say that the inability to underwrite according to the ACA means that they have been faced with paying bigger claims than expected. Pent-up demand from the newly-enrolled, specifically for expensive specialty drugs, is also a factor, according to payers. But mostly the impetus behind requests for large increases appears to be uncertainty: How many people will sign up? Where is the balance between keeping costs low enough to attract customers but high enough to pay for sicker plan members?