Concerned that premiums will rise significantly for policies sold on health insurance exchanges, the Obama administration has sent letters to insurance commissioners requesting that they examine rate requests vigorously before approving them.
Wisconsin’s Insurance Commissioner Ted Nickel received what spokesman J.P. Weiske called the “generic” letter last week from Kevin Counihan of the Centers for Medicare and Medicaid Services.
Counihan, CEO of the federal health exchange, opined in the missive that some rates are rising too fast. But Weiske suggested that the letter was unnecessary because Wisconsin has a competitive market and that the insurance commissioner’s office already closely reviews insurance rate hike requests.
According to ACA regulations, state agencies are largely in charge of premium levels in their respective jurisdictions. According to a recent Kaiser Health News story, only a few states have finalized premiums for 2016. Enrollment starts in November.
In June, WisBusiness.com reported that Wisconsin Physicians Service Insurance Corp. 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 requesting 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.
Elsewhere in the country, rates are also rising. In Maryland, according to KHN, the major insurer on the exchange, CareFirst, is requesting a rate increase of 30 percent for some of its plans. In Kansas, Blue Cross and Blue Shield of Kansas is asking for rate hikes averaging 37 percent.
Weiske said Wisconsin is classified as an “effective rate review state” under CMS rules, which means the federal government has approved its plans for assessing rate hike requests.
“The other thing you need to understand is the ‘medical loss ratio,’” he said. “That means if insurers’ rates are excessive, they are required to refund that money back to policy holders. That’s been in place for several years now. Wisconsin has had some of the lowest rebates in the country. And that reflects the fact that we have such a competitive market, which keeps rates in check.”
He said during the past year, Wisconsin had 15 insurance plans available to the public on health exchanges.
“And we had even more than that off the exchange in the individual markets,” he said.
Phil Dougherty, senior executive officer for the Wisconsin Association of Health Plans, agreed that the Badger State has a highly competitive market.
“While Mr. Counihan may have intended that his letter apply to all state health insurance markets, not all state health insurance markets are the same,” he said.
“Wisconsin’s health insurance market is the most competitive in the country, according to a competitiveness index tracked by the Kaiser Family Foundation. The best regulator of health insurance rates is a competitive health insurance market.”
He said this competition offers consumers multiple choices of quality health plans and better access to health care at a more affordable cost and that “nothing in the trends cited by CMS will change that.”
— By Brian E. Clark