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Insurers take first steps towards hefty Obamacare rate hikes

State insurance companies have started a process that could lead to big rate increases for many Wisconsin residents and small groups that have health insurance as part of the Affordable Care Act, commonly known as Obamacare. The hikes should be blunted somewhat for many low-income people because their policies are subsidized by the federal government.

Wisconsin Physicians Service Insurance Corp. (WPS) is requesting a hike of nearly 33 percent for its individual policies under the ACA and an 11.5 percent increase for small groups. Unity Health Plus Insurance Corp. is asking for rate increases of 10.3 percent and 18.2 percent for two individual plans. Unity is an affiliate of UW Health.

All totaled, 11 companies that sell health insurance under the ACA here have notified the Centers for Medicare & Medicaid Services that they plan to raise their rates 10 percent or more starting Jan. 1.

Insurers say they are asking for these hikes because the costs of medical care are continuing to go up. Around the country, proposed increases are all over the map, with one company asking for an 85 percent jump, according to published reports that said some firms may have low-balled their prices for 2015 and are now trying to catch up.

In its filing on the HealthCare.Gov website, WPS said it is asking for the rate change “to account for continued increased cost in providing medical care, increased utilization of services by consumers, and the impact of numerous additional taxes and fees imposed upon our plan.”

And in a statement released Thursday afternoon, WPS said “For the first time since the ACA took effect, insurers are basing their 2016 premiums on a full year's worth of ACA claims data. Actual costs for 2014 have turned out to be much higher than expected, partially as a result of the transitional policy, which has kept many thousands of healthier individuals on non-ACA plans and raised the average cost of ACA plans.

“Furthermore, cost subsides from the federal government under the ACA that weaken in 2016 (and in 2017) will exacerbate premium trends. Lastly, premium rates are more important than premium trends and the WPS premium rates represent good value for those who value the freedom of doctor and hospital choice that WPS plans allow.”

For its part, Unity said in its filing that the 18.2 percent hike is warranted, in part, “based on past claims experience for Unity’s individual single risk pool.”

The proposed rate increases were submitted for plans inside and outside the Health Insurance Marketplaces in all states using the federally run HealthCare.gov Marketplace enrollment platform and some state-based Marketplaces. These increases will not be finalized until October and could change.

Andy Slavitt, CMS acting administrator, said the rates will be “subject to vigorous rate review and revision and the final rates consumers will see this fall will reflect the breadth of choice and competition in the marketplace.”

J.P. Wieske, a spokesman for the state’s Office of the Commissioner of Insurance, said his agency will not make any rates, forms or complaints available until they are closed by the CMS after October. He also noted that companies increasing rates by less than 10 percent do not have to report proposed hikes.

However, so consumers can see what may be in the works, he said his office provides links to rate reviews at the https://ratereview.healthcare.gov/ federal website. In addition, it has a link to the companies selling ACA health insurance policies that are above the 10 percent threshold: http://oci.wi.gov/consumer/health-comprates2016.htm.

-- By Brian E. Clark
For WisBusiness.com


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