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RALEIGH, N.C. (AP) — North Carolina's largest health insurer wants to raise rates by an average of nearly 19 percent next year for individual policies sold on the online insurance marketplace, officials said Tuesday, but federal officials say most customers likely would pay less because of the federal subsidies.
Blue Cross and Blue Shield of North Carolina said it is seeking the 18.8 percent increase for 2017 for policies sold on the online marketplace created by of President Barack Obama's federal health insurance overhaul, the company reported to the state insurance department.
Aetna plans to continue selling marketplace policies next year, while Cigna is joining the market in North Carolina as UnitedHealthcare exits.
Aetna is requesting an average increase of about 24 percent for all North Carolina policies sold to individuals next year, including both marketplace plans and those sold elsewhere, the company told state regulators.
Under the federal law called the Affordable Care Act, insurers can treat rate information as trade secrets unless they represent an average increase of more than 10 percent.
AETNA submitted proposed rates in all 15 states where it now does business, but won't decide whether to sell the policies until September, spokesman Walt Cherniak said in an email.
Blue Cross said it wants the increase because people required to buy their own insurance by the law tend to be older and sicker than other customers and use more and costlier medical services.
The company said it has lost more than $400 million on its ACA business in the first two years of selling the plans and may ultimately drop out of the market.
Roughly 330,000 customers bought ACA plans from Blue Cross this year, the company said, and the more than 610,000 North Carolinians covered by ACA plans meant North Carolina ranked fourth in the country by total enrolled by insurers.
The state Insurance Department will review the proposed rate increases and could reduce them. Any individual's actual rate increase for each policy will be affected by factors including age, location and plan level.
The Obama administration is pushing back against reports of double-digit premium increases hitting consumers, saying that for years before the law was adopted, big rate increases were the norm and people with pre-existing medical conditions were refused coverage.
"Changes from year to year are expected. The ACA has ushered in a new individual insurance market that offers a different type of coverage than previously existed. As a result, issuers in the individual market compete on quality and cost-effectiveness. Unsurprisingly, some issuers are adapting faster than others to this new market. That's the way a healthy market works," the U.S. Department of Health and Human Services said in a news release Tuesday.
Typical consumers pay much less than the average reported rate because tax credits reduce coverage costs for about 90 percent of those buying policies on health insurance exchanges, DHHS said.
The average monthly premium for an insurance plan sold on North Carolina's federally run marketplace rose 3 percent — from $95 in 2015 to $98 this year — for those who qualified for subsidies, the federal health agency said. Also, the marketplaces help consumers make an apples-to-apples comparison of plan features and prices, which was nearly impossible before the ACA took effect, DHHS said.
About four out of 10 returning marketplace consumers in North Carolina switched plans last year and saved an average of $576 a year, DHHS said.
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