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Obamacare sticker shock: Big rate hikes proposed for 2016

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NEW YORK — Hold onto your wallets … many insurers want to substantially hike rates on Obamacare policies for 2016.

Many are proposing double-digit premium increases for individual policies, with some companies looking to boost rates more than 60%, according to a list posted Monday by the federal Centers for Medicare & Medicaid Services.

In Florida, for instance, United Healthcare wants to raise the rates of plans sold on the Obamacare exchange by an average of 18%. Individual policies available outside the exchange through United Healthcare or through a broker would go up by 31%, on average, with hikes as high as 60% for certain plans in certain locations.

In Texas, insurer Scott & White is looking for a 32% increase for exchange-based plans, while Humana is asking for an average 30% boost for its exclusive provider organization policies, which generally cover only in-network services.

Insurers are asking for the premium spikes because their enrollees are going to the doctor, getting lab tests and filling prescriptions more often than anticipated, according to interviews with insurance industry experts and a CNNMoney review of the rate filings.

“We’ve seen a great pent-up demand for services,” said Aaron Billger, spokesman for Highmark, a Blue Cross Blue Shield licensee offering plans in Pennsylvania, Delaware and West Virginia. Enrollees in Obamacare exchange plans use more healthcare than those in job-based policies, he noted.

Insurers submitted their proposed rate hikes for individual policies sold both on and off Obamacare exchanges for review by state officials. Insurers can opt to offer plans only on the exchanges, outside of the them by offering them directly through the provider or brokers or both, but policies with similar coverage must be priced the same.

Rates for Obamacare plans have been closely watched — and their affordability hotly debated — since the exchanges first opened in 2014. Insurers had a tough time setting rates in the first two years because they didn’t have a lot of data on how much customers would visit the doctor. Now they base their prices on actual usage, said David Axene, fellow at the Society of Actuaries, an industry group. Some insurers may have underestimated and set their prices too low in 2014 and 2015.

In asking for a 26% rate increase, Blue Cross and Blue Shield of North Carolina cited hospital in-patient care, particularly cancer and heart conditions, emergency room visits and specialty drugs as major contributors to the hike.

Insurers, however, probably won’t be granted all that they seek. Insurance commissioners in 36 states have the power to deny the rate requests, though they usually negotiate smaller hikes with insurers.

Also, the requested rate changes for 2016 can vary widely based on the specific plan. UnitedHealthcare, for instance, noted it’s only asking for a 1.2% increase on some of its plans. This reinforces the need for consumers to shop around when open enrollment begins in November and not just renew their existing plan.

While the proposed rate hikes seem steep, they won’t hit Obamacare enrollees as hard since most receive federal subsidies to help pay their premiums. But even subsidized enrollees will have to pay more depending on the plan they select. Those signing up for individual coverage outside an exchange will pay full freight since they aren’t eligible for subsidies.

Rates will be finalized in coming weeks, but consumers may not learn the final prices until just before enrollment opens.

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15 comments

  • Magnus

    And where do those subsidies come from? Taxes… I guess free healthcare isn’t so free after all huh?

    And shocker! People get sick and go to the hospital and get prescriptions. Anyone can tell you that. More went than anticipated? That’s poor planning. Any plan should have extreme cases added to it of the just in case type, obviously that didn’t happen here. Looks like I can kiss more of my hard earned cash good bye thanks to this.

  • "peety"

    should we actually wait for the state boards to review these increases or just attack now? I guess haters don’t need facts though.

    • tootietuttle

      you must be a hater peety, because you never have facts. Fact is, everyone knew rate hikes were inevitable, typical “draw you in with a low market entry price, once hooked, slap you senseless with a huge rate hike which you have no choice but to accept”. Poor peety, Obama just smacked you upside the head and you are clueless as always.

      • "peety"

        between 2003-2008, health care costs rose 50% Where was the GOP with their solutions?

        Since ACA was passed, health care costs have risen at their lowest rate in history.

        7 years later, 50,000 lives saved, over one million jobs created, and the GOP still sits on their hands.

        • tootietuttle

          GOP had several ideas including 1) tax credits; 2) not changing and studying the problem some more before implementing a damning obamacare policy.
          As for your Brian Williams/NYT approved biased stats (BS stats for short), these are so unrealistic they are laughable….50k saved, 1 million jobs created??? LOL….you forgot to include that 300000 unicorns were treated and released into the wild under obamacare.

  • Rokkoon

    You make something mandatory and expect the costs to stay low, FOFLMAO, anybody with half a brain knew this was going to happen!

    • "peety"

      wait, you mean corporations are trying to increase their profits? in America????

      We knew it would happen because the insurance co’s tries the same bs last year, yet after the review board, rates rose 4%.