Too Soon To Deride High Obamacare Rate Hikes

Some health insurance companies are asking for big price increases next year and that has again riled critics of the federal health care law.

The numbers released last week came out of an Affordable Care Act requirement that insurance companies tell government regulators by June 1 if they’re requesting price hikes of more than 10 percent. But not all of the story is yet reported. Take, for example, Montana.

medical price tag 570Some officials opposed to the law, like U.S. Sen. Steve Daines, R-Mont., decried the increases in a speech on the Senate floor. “Blue Cross Blue Shield, which is Montana’s largest insurer, is asking for an average increase of 23 percent for Montanans enrolled in individual plans,” he told colleagues last week.

While that sounds scary, it turns out that Blue Cross Blue Shield in Montana is actually asking for large price hikes on just two plans it wants to offer in the state. While it’s not yet public how many they’ll offer in 2016, they currently offer 50 plans.

Caroline Pearson, vice president for health reform at the consulting firm Avalere Health, has been digging into available numbers on insurance pricing across several states. She said such price hikes are not the norm. She’s not seeing anything like a 20 percent average increase in the price of monthly premiums.

“Those are not necessarily the plans that hold the bulk of enrollment,” she says. “So, while some of those plans may be going up a lot in price, that doesn’t mean a lot of enrollees are necessarily affected.”

In the handful of states where data is available (Connecticut, Maryland, Michigan, Oregon, Virginia, Vermont, Washington state and Washington, D.C.), Pearson says the majority of people buying health coverage on exchanges won’t face serious sticker shock.

“We have seen that about 6 percent average rate increases are expected for 2016,” Pearson says.

As Avalere looks at the less expensive plans, she adds, “We’re seeing anywhere from a 5 percent increase for the lowest-cost plan available, to a 1 percent increase for the second-lowest-cost plan available. So we’re really looking at very modest increases — very consistent with what we saw from 2014 to 2015.”

Pearson also points out that the price increases — big or small — are by no means final. They’re requests from insurance companies. And, in some states, insurance commissioners have the ability to negotiate with the companies to moderate rate increases. The actual prices of health plans being sold on the exchanges will be final this fall.

This story is part of a reporting partnership that includes Montana Public Radio, NPR and Kaiser Health News.

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