The first rates for 2016 premiums have been released and you?ve probably heard some yelling about them. In its infinite wisdom, HHS only shows rates hikes of 10 percent or more.
In some markets, rate requests are only revealed for a single carrier. Anyone looking at that site only glimpses a piece of a state's on- and off-exchange health plans. Anyone with a rate increase of less 10 percent or a rate cut is excluded.
With opponents rummaging for any sign of ACA instability, premiums are an easy target. Even if the rates only offer a slice of the market, we can draw some lessons from them.
Some 2016 premiums were always going to increase. Insurers guessed 2014 premium rates. For 2015, limited claims data on the new population forced them to guess again. In 2016, insurers finally have a full year of data on which to base claims. Exchange customers often came into coverage with unmet health needs, driving up medical and drug utilization.
Plans that receive an inordinate amount of these members were bound to raise rates. This is no different than in 2015, when the plans that held the largest market share in 2015 typically raised rates.
Take New Mexico, where the outcry over Blue Cross and Blue Shield of New Mexico's premium increases between 49 and 65 percent (or more) echoed all the way to the nation's largest newspapers. The Blue plan is the only New Mexico carrier with a rate request higher than 10 percent. Every other carrier in New Mexico came in below the threshold. The Blue plan's rate increases might be a shock for members, but savvy exchange shoppers will explore their open enrollment options.
Some of the increases are outliers. The biggest increases across all markets came from Assurant Health, with some peaking in the 70 percent range. Assurant won?t sell exchange policies anywhere in 2016 and plans to sell off its health insurance business, so its rates aren?t germane to most markets.
A number of the notable increases came from plans in the Small Business Health Options Program (SHOP) exchange, so there impact should be minimal. Nationally the small-group exchange enrollment barely registers. Most groups signing up through the SHOP market are exceedingly small and are able to get the most out of ACA tax incentives. Those affects will be shopping again in 2016, which isn?t much different from any other year for small groups.
Impact on the individual market vary much more state to state. In Texas, the Blue plan's rate increase could affect more than 700,000 people. In Wyoming, WIN Health's increases could affect 10,000. Both could change benefits for significant portions of their respective exchange populations.
Rate requests can change. What we see in the early filings are averages. Some will pay more, some will pay less. States with rate review will undoubtedly bring down some of those rates. Take Washington, where Insurance Commissioner Mike Kreidler took a buzz-saw to some 2015 rates, and many states will do the same to any rates that seem too egregious. Anything in the 50-percent range will drop under review. Some will drop precipitously.
Those carriers with large increases should hope that they do. Plans that aren?t listed by HHS will make that known. If a competitor is getting headlines for 50 percent, insurers with lower rate increases or even rate cuts (yes, some plans will cut for 2016).
While awaiting a full picture of states? 2016 exchange markets, the early glimpses can provide important insights, as long as they reside in the proper context.