Dive Brief:
- WellPoint has announced that it will probably seek "double-digit plus" rate hikes for next year, surprising industry analysts.
- WellPoint may be hedging its bets on ACA members; it's currently the largest participant in all the exchanges and has already raised membership by increasing its Medicaid participation.
- "The double-digit increase surprised me," Stephen Zaharuk, a Moody's analyst, told Bloomberg. "If everything is working according to plan, then the increases should be where the medical trend is, which should not be double-digit."
Dive Insight:
Having decided it could make money on ACA beneficiaries, now WellPoint has to make good on that population, a risk pool with which they currently have little experience. I don't know why the analysts are surprised that WellPoint is choosing to be very cautious at this point. That being said, it remains to be seen whether regulatory authorities will allow WellPoint to make such a hedge. If they do, expect to see other large insurance companies ask for their share too.