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SALT LAKE CITY (AP) — More than half a dozen health insurers in Utah say they need to raise rates on individual policies next year by 10 percent or more because of higher than expected care costs and other expenses.
The proposed hikes affect plans offered through the federal health insurance website, a key element of President Barack Obama's health care law, and on individual plans sold directly by brokers and agents.
That's a small portion of the total market, where many more people get insurance through their jobs.
Insurers in Utah and around the country explain the double-digit increases by pointing to new customers who went without coverage or treatment for years, rising costs of prescription drugs, and other expenses.
The proposed rate increases and company explanations were posted on the federal government's healthcare.gov website this week.
Arches Mutual Insurance Co.
Arches Mutual Insurance Co. is requesting to raise rates on some plans by nearly 60 percent.
Shaun Greene, chief operating officer of Arches, said rates in the first year were based on population estimates, not actual costs of customers who may have had conditions that went untreated for years. The company now has data from 2014, the first full year of customers getting insurance through the public online marketplace.
"We knew there was pent up demand, but we didn't realize that they were as sick as they are," Greene said.
He said the company is trying to adjust its rates in one year but suspects other companies may try to spread needed increases over several years.
In 2017, price increases may not be so staggering because those who signed up for 2015 appear to be healthier, said Jason Stevenson, a spokesman for the Utah Health Policy Project, which advocates for affordable care.
That could help balance costs in the overall market in the years ahead.
Stevenson said anyone getting insurance through the federal website when open enrollment begins this fall should shop around for the best deal that meets their needs.
Regence BlueCross BlueShield
Regence BlueCross BlueShield of Utah has requested an increase of about 23 percent for some plans but says that on average, rates for its plans will jump about 17 percent next year. That's about $44 more a month, on average.
Lou Riepl, a spokesman for Regence BlueCross BlueShield of Utah, said much of the increase is driven by rising medical costs, particularly for prescription drugs.
He said drug costs increased substantially last year and expensive specialty drugs treating hepatitis C and high cholesterol play a role in the costs.
The rates also include the company's expected taxes and fees under the health care law. In 2014, that was $25.5 million for Regence BlueCross BlueShield of Utah, Riepl said.
"We have to look at all of those things and plan accordingly," he said.
The rates are preliminary and won't be finalized until October, after regulators at Utah's Insurance Department have reviewed them.
State Rep. Dean Sanpei, a Provo Republican who serves on Utah's Health Reform Task Force, said he thinks rate increases will get worse before they get better because several cost-stabilizing measures in the health care law will expire after 2016.
A ruling from the U.S. Supreme Court this summer could upend the market entirely if the court's ruling does away with the law's federal subsidies that many rely on to afford their insurance.
It's unclear how state and federal lawmakers would react to such a decision and if they'd find a way for those relying on subsidies to keep their coverage.
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Online:
https://ratereview.healthcare.gov
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