The last major insurer on Alabama ACA market is seeking an average 39% individual premium hike
- Blue Cross Blue Shield of Alabama is proposed to raise individual premium rates on the ACA marketplace on average by 39%, Birmingham Business Journal reported.
- The carrier is only remaining major insurer on the ACA marketplace, BBJ reported. Both UnitedHealthcare and Humana decided not to participate in the Alabama exchange marketplace next year.
- While rates have not yet been approved by regulators, the news emphasizes a bind healthcare consumers could find themselves in as they may find limited options for inexpensive care next year.
The proposed increases could affect more than 160,000 individuals, www.AL.com reported. The range for individual premium increases varied from 23.4% to 41.5%, BBJ noted.
The insurer spared employer plans from such heavy rate increases. Proposed employer plan rates increased by 2.89% to 5.75%, according to BBJ. This market could potentially affect 19,000 employers covering about 230,000 individuals.
The move follows the recent news that New York finalized its premium rates for 2017. On average, individual premiums in the state will increase by 16.6%, down from earlier proposed average rate increases of 17.3%. So it's possible premium rates could down come from the insurer's proposals as regulators work to finalize them by fall. By how much remains to be seen though it's safe to say individual premium rates will rise next year across the nation.
However, one thing is for certain. It's been a struggle for some insurers to find their footing in the ACA marketplace.
"The dynamics of the ACA individual market have been very challenging as total claims paid and their related administrative expenses have continued to exceed premiums. Blue Cross reported an overall financial loss of $138 million for 2015 and projects underwriting losses on its ACA individual plans to exceed $250 million over the 2014-2016 period," the company said in a prepared statement.
"The exiting of other insurers from the exchange in Alabama is a clear indication of the difficulty in providing ACA health plans at the most affordable price without incurring significant financial losses. Because Blue Cross has been providing Alabamians access to healthcare coverage for 80 years, we are planning to stay in this market for another year."
Before state's individual plan rate proposal began trickling in, pundits opined that regions with a limited number of choice could feel the pain of higher individual premiums. As Blue Cross Blue Sheild of Alabama just showed, being the lone major insurer in the state's market and proposing an average 39% individual premium rate hike doesn't look good for the next year's potential individual plan policyholders. All 160,000 of them.
Follow Jeff Byers on Twitter