Individual health insurance rates to rise 13.2%
Florida residents will be paying an average increase of 13.2% for individual health care insurance in 2015, according to preliminary numbers from the Florida Office of Insurance Regulation.
No data has been released yet on employer plans for 2015.
The rate proposals include all Affordable Care Act (ACA) health plans on the individual market. Fourteen companies filed plans for Florida’s 2015 individual plans on the federal exchange, three of which are new and 11 are ACA-compliant plans already offered in the state when the federal act was passed last year.
According to the state’s insurance regulator, eight of the returning 11 plans on the federal exchange will increase premium rates: Blue Cross Blue Shield of Florida Inc. by 18% for a Preferred Provider Plan (PPO), Cigna Health and Life Insurance Company by 17% for a PPO, Coventry Health Care of FL Inc. by 14% for a Health Maintenance Plan (HMO), Florida Health Care Plan Inc. by 11% for an HMO, Health First Insurance Inc. by 23% for a PPO, Health Options Inc. by 20% for an HMO, Humana Medical Plan Inc. by 14% for an HMO and Preferred Medical Plan Inc. by 14% for an HMO. Plans offered on the federal exchange are eligible for financial assistance.
Three plans on the federal exchange are lowering premium rates: Aetna Health Inc. by 5%, Molina Healthcare of Florida Inc. by 12% and Sunshine State Health Plan Inc. by 10%.
A number of factors led to increased individual insurance rates in 2015 as part of the Affordable Care Act’s marketplace, said Paul Kluding, senior director of media relations for Blue Cross Blue Shield of Florida. One was the “Keep your plan” impact, he told Miami Today.
“For states that allowed non-ACA-compliant plans to be renewed, such as Florida, healthier individuals retain their prior coverage and sicker people moved into new, marketplace-based coverage,” he said.
In addition, Mr. Kluding said, the decision to allow individuals to keep these plans was announced after 2014 marketplace rates were submitted. “Having less healthy people than anticipated as customers forced insurers to raise rates to cover more of the sicker individuals.”
Enrollment issues also led to increased premium rates in 2015, Mr. Kluding said. “This prevented or discouraged many from signing up, leaving mostly the sickest members to endure the process of enrollment.”
In addition, he said, the increasing cost of health care reflects not only the continued increase in per-unit costs of medical services but also the increase in health care utilization. “Premiums for 2015 reflect the fact that more insurance customers will be utilizing medical services.”
Mr. Kluding said the factors that go into setting premiums include competition among insurers, the population’s overall health and population density. Additionally, he said, the amount an individual will pay could vary significantly once age, living area, smoking status, family size and income are factored in. Rates are set based on the anticipated behavior of those in the group of insurance or “pool” and the larger the pool, the greater variance in health status and utilization, Mr. Kluding said.
As for whether deductibles and co-insurance costs be going down – given the increase in premiums – Mr. Kluding said the cost of coverage can change based on individual circumstances.
“But it’s important to keep in mind the subsidy effect. Subsidized members should not bear the full cost of coverage since they are receiving financial assistance to help them afford the insurance premiums,” he said. “The specific rate impact on 2015 subsidies is yet to be determined, but these members likely will pay less than the non-subsidized member will.”
Mr. Kluding said it’s difficult to say where premiums, and medical expenses generally, are headed in the next five to 10 years.
“Since the marketplace has been in place for less than one year, we do not know enough about the health care consumption habits to predict what will happen to this group’s health in the future,” he said. “The plan and hope is that as more and more customers become engaged in their own health, we will see an improvement in overall health.”
A number of companies offer new plans for 2015: Health First Health Plans Inc. with a proposed average monthly premium per person of $447, Time Insurance Company for $457 monthly and UnitedHealthCare of Florida Inc for $404 monthly.
Plans off exchange only available to Florida residents (where no eligibility for financial assistance exists) are Aetna Life Insurance Co. with a PPO monthly charge reduced by 7%, Coventry Health Plan of FL Inc. with an HMO monthly charge increased by 1%, Freedom Life Insurance Co. of America’s PPO monthly charge increased by 10%, Humana Health Insurance Co. of Florida Inc. with a PPO monthly charge increased by 2% and UnitedHealthCare Life Insurance Co. providing new PPOs.
Miami-Dade residents can choose from a number of individual market plans: Aetna Health Inc., Aetna Life Insurance Co., Blue Cross Blue Shield of Florida, Cigna Health and Life Insurance Co., Coventry Health Care of Florida Inc., Freedom Life Insurance Co. of America, Health Options Inc., Humana Health Insurance Co., Molina Healthcare of Florida Inc., Preferred Medical Plan Inc., Sunshine State Health Plan, Time Insurance Co. and UnitedHealthcare Life Insurance Co.
Health insurers continue to file their rates with the Florida Office of Insurance Regulation, said Harvey Bennett, director of communications. Rate pre-approval or disapproval is not required by the office for ACA-compliant major medical plans, but the office still has full rate review and approval authority over pre-ACA “grandfathered” plans, transitional plans and dental plans, he said.
“Full rate review authority for major medical plans will be restored to the office for plan years 2016 and beyond (per state law). For pre-ACA plans, the office has the ability to do a rigorous review to ensure that benefits are reasonable to the premiums charged, that contracts and other forms are free from ambiguous, misleading or deceptive language and that rating practices are not unfairly discriminatory,” Mr. Bennett said.
In Florida, health insurers are required to file their rates with the federal Department of Health and Human Services (HHS). If rates are excessive, Mr. Bennett said, HHS can keep a plan off the exchange.
“For both the policy form and rate review, the office reviews for compliance with all Florida laws and rules and federal laws and regulations,” he said. “If the office determines either the policy or rate is not in compliance with the federal laws and regulations and is unable to obtain voluntary compliance from the insurer, the office will report potential violations to HHS for appropriate formal enforcement action.”
The Florida Office of Insurance Regulation, as part of its core mission, strives to ensure that policyholders get the full benefit of their policies and that insurers pay claims promptly; and performs market conduct examinations and investigations for compliance with Florida laws and rules.
“The office released 2015 ACA-compliant rates last month to give Florida consumers advance knowledge of the average premiums and rate changes they can expect to see when the open enrollment period begins Nov. 15,” Mr. Bennett said. “We have advised that the best policy will depend on the individual’s circumstances. Consumers shouldn’t focus exclusively on price, as the quality of the plan may not be suitable to the person’s needs. They should consult their insurance agent (rates vary by county, age, income, smoking status and out-of-pocket expenses desired).”
The proposed premium rates that have been published by his office are subject to change and won’t take effect until Jan 1, according to Mr. Bennett. The enrollment period is to close on Feb. 15, 2015.