Expect insurers to seek significant premium increases under President Barack Obama’s health care law, in a wave of state-level requests rippling across the country ahead of the political conventions this summer.
Insurers say the law’s coverage has been a financial drain for many of them, and they’re setting the stage for 2017 hikes that in some cases could reach well into the double digits.
For example in Virginia, a state that reports early, nine insurers returning to the HealthCare.gov marketplace are seeking average premium increases that range from 9.4 percent to 37.1 percent.
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UnitedHealthcare’s decision to quit insurance exchanges in about 30 states next year has patient advocates concerned that fewer options could force consumers to pay more for coverage and have a smaller choice of network providers.
The company’s departure could be felt most acutely in several counties in Florida, Oklahoma, Kansas, North Carolina, Alabama and Tennessee that could be left with only one insurer, according to an analysis by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
To sell policies next year on the health law’s exchanges, also called marketplaces, insurers must apply within the next few weeks and get state approval this summer.
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California legislators are attempting to clear the way for undocumented immigrants to buy health insurance through the state’s insurance exchange — potentially setting a national precedent.
The fusion of illegal immigration and the Affordable Care Act, two of the most highly charged elements on the periodic table of U.S. politics, could engender a combustible reaction, especially in an election year.
Immigrants living in the country illegally are excluded from the insurance-expanding provisions of ObamaCare. They are not eligible for Medicaid (called Medi-Cal in California), and they are not allowed to purchase a health plan from the federal marketplace or any of the state exchanges.
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UnitedHealth Group Inc. will pull out of Kentucky’s individual marketplace for ObamaCare plans, bringing to 26 the number of states the health insurer is quitting next year.
The company plans to halt sales of individual plans in Kentucky for 2017, both inside and outside the state’s Affordable Care Act exchange, as well as the small-business exchange, UnitedHealth said in a letter to the state’s insurance department. The letter was obtained by Bloomberg through an open records request.
UnitedHealth’s exits from the state ObamaCare markets threatens to limit the number of options for consumers when they shop for coverage for next year.
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Here’s some bad news for the insurance industry: Unexpectedly generous corporate subsidies didn’t save companies selling ObamaCare policies from bleeding red ink. The worse news: Those subsidies are set to expire in 2017, meaning that insurers will have to make ends meet without billions in handouts.
Those are among the matters discussed in a study by the Mercatus Center, authored by Brian Blase, Edmund Haislmaier, and Doug Badger. Thestudy, based on detailed data derived from insurer regulatory filings for the 2014 benefit year, finds that companies that sold ObamaCare plans in the individual market lost more than $2.2 billion, despite receiving $6.7 billion (an average of $833 per enrollee) in “reinsurance” subsidies. Those reinsurance payments were 40 percent more generous on a per-enrollee basis than insurers had expected when they set their 2014 premiums.
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A Crain’s investigation shows how Health Republic, the insurance company that was supposed to be about people, not profits, misled its customers and ran itself into the ground.
It’s been decades since a New York health insurer has cratered so dramatically. Providers told Crain’s they signed contracts to treat Health Republic members because they assumed the insurer had been fully vetted by the state. The Cuomo administration had even issued press releases in 2014 and 2015 crediting DFS’ oversight as evidence of the state’s role in keeping premiums affordable.
“We feel betrayed,” said Robert Glazer, chief executive of ENT and Allergy Associates, a large medical practice with 173 physicians. The only warning signs of trouble were early last year, when Health Republic delayed claim payments by three to four months.
“We have no idea if our doctors will be reimbursed,” said Glazer, whose practice is owed more than $650,000. Even if money is recovered, Oechsner said payments to providers “would likely be modest at best.”
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Health insurance companies are laying the groundwork for substantial increases in ObamaCare premiums, opening up a line of attack for Republicans in a presidential election year.
Many insurers have been losing money on the ObamaCare marketplaces, in part because they set their premiums too low when the plans started in 2014. The companies are now expected to seek substantial price increases.
“There are absolutely some carriers that are going to have to come in with some pretty significant price hikes to make up for the underpricing that they did before,” said Sabrina Corlette, a professor at Georgetown University’s Center on Health Insurance Reforms, while noting that the final picture remains unclear.
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Even before President Obama leaves office, ObamaCare has begun unraveling.
The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated. Last week, UnitedHealth Group announced that, after estimated losses of more than $1 billion for 2015 and 2016 under ObamaCare, the company was pulling out of most of its ill-fated exchanges. In fact, commercial insurers across the country are hemorrhaging money on ObamaCare at alarming rates.
The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the ObamaCare nonprofit insurance cooperatives created under the law failed.
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A potential shakeup in Arizona’s Affordable Care Act marketplaces is resurrecting President Barack Obama’s 2010 health-care law as a political issue in this year’s U.S. Senate race.
The developments mean customers will have fewer subsidized plans to pick from next year, and in some rural counties, they could have no options at all. UnitedHealthcare, the national insurance giant, on Tuesday signaled that it intends to abandon Arizona’s Affordable Care Act marketplace in 2017. Blue Cross Blue Shield of Arizona, the only other insurer to offer plans in all of Arizona’s 15 counties, also is considering pulling out of some areas.
Arizona voters could face a stark choice on the issue in November.
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The ACA significantly altered the rules governing the individual insurance market, and the general effect was to lower premiums for older and less healthy people and raise premiums for younger and healthier people. To induce younger and healthier people to enroll, the law contained the individual mandate and subsidies for both buyers and, for the first few years of the program, sellers of insurance in the form of premium stabilization programs.
This study analyzes data from HHS from 2014, the first year of the ACA’s implementation, and finds that insurers suffered significant losses despite eventually receiving much larger payments from the law’s reinsurance program (one of the premium stabilization programs) than they expected when setting their 2014 premiums. Given the same population and same utilization of services from that population, insurers would have had to price average premiums more than 25 percent higher to avoid losses in the absence of the reinsurance program.
While insurers’ performance varied significantly across carriers and states, the large overall losses in 2014 raise questions about the long-term stability of the changes made by the ACA, particularly after 2016 when the reinsurance and risk corridor programs end and premium revenue must be sufficient to cover expenses.
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