U.S. health insurers are submitting their 2016 rate requests for Affordable Care Act policies, with some asking for big increases as they adjust to customers who’ve recently gained coverage through the marketplaces.
Many of the requests, which span hundreds of insurance plans across dozens of states, are for increases of 10 percent to 20 percent, though some propose far greater hikes. Blue Cross and Blue Shield of Alabama, for example, is asking for a 71 percent rate increase for one plan.
The requests are disclosed on a government website that only lists plans that have asked for rate increases of at least 10 percent, which makes it difficult to determine how much the average rate will rise next year.
Taxpayers can end up covering part of the tab for higher rates because subsidies are based on the cost of insurance and on income. On the other hand, individuals can switch plans, limiting the effects of the increases as long as cheaper options are available.
Some of the rate increases are tied to higher-than-expected medical costs that insurers have already faced, according to a Bloomberg Intelligence review of state filings. The requests are subject to reviews in some states, where regulators can limit increases.
One big insurer, Blue Cross and Blue Shield of Texas, said its 2016 rate requests for individual policies range from a 20 percent increase to a 3 percent decrease, in a disclosure on the federal website.
Blue Cross Blue and Shield of Texas said that it took in $2.1 billion in premiums on individual plans in 2014, while paying out about $2.5 billion in claims. That means the insurer lost about $400 million, even before accounting for administrative expenses. The company said more than 700,000 members could be affected by its rate-increase proposals, based on enrollment at the end of March.
In Connecticut, UnitedHealth Group Inc. is requesting an average increase of 12 percent, and Anthem Inc. is seeking to raise rates 6.7 percent. Anthem said it has 34,553 policies in place in the state, while UnitedHealth insures 970 via policies bought on the state marketplace.
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