Insurers are proposing big premium increases for next year’s health coverage. Some are struggling to make money. They are seeking increases to cover costs that have exceeded their estimates and continue to lag. Business has not stabilized for the insurance exchanges as health plans continue to change. Numbers of insurers say their enrollees who purchased through the exchanges have had higher costs than they expected.
Humana has made a very small profit on individual plans, not counting administrative costs, and expects a loss for the year. A large insurer on the Oregon exchange seeks an increase of nearly 30%, this after a 25% increase last year. Anthem in Virginia and Kaiser Foundation Health Plan of the Northwest want 15% more. Blue Cross/Blue Shield in Virginia proposed rate hikes of 25% and will eliminate its lowest-premium plans, the bronze tier, which has the highest cost-sharing for participants. Humana may exit the exchanges next year, this following UnitedHealth’s planned withdrawal disclosed last month.
Not all insurance carriers will need large premium increases to improve their finances. Anthem and Aetna were upbeat about their prospects for marketplace earnings, yet they also aim to improve next year. United’s withdrawal from the exchanges may push competitors to raise their rates. Companies remaining in the exchanges anticipate the effect of signing up the enrollees that brought United their losses.
Rate increases will vary from state to state and between companies. The requested rates will be analyzed in the next few months to make sure they cover costs without being too high or low. Federal subsidies continue to offset the cost of premiums, yet people are anticipating price increases. By shopping around, all consumers have the opportunity to pick the best deal.
Radnofsky, Louise and Mathews, Anna Wilde. “Health Insurers Struggle to Offset New Costs.” Business. The Wall Street Journal, 4 May 2016. Web. 5 May 2016.