Insurance rate hikes sought in federal marketplace
BATON ROUGE, La. (AP) — Thousands of people who bought health insurance through the marketplace created by the federal health care overhaul face price hikes next year that could top 10 percent.
More than 60,000 people who get health insurance through the individual marketplace — which was expanded by the federal Affordable Care Act — are in line for double-digit rate increases on Jan. 1 if they keep their current policies.
The companies filed paperwork with Louisiana's insurance department outlining those planned rate increases for 2015. Lower rate hikes falling below 10 percent next year will hit individual market policies covering another 27,000 people.
Insurance Commissioner Jim Donelon said the average health insurance rate increase planned in the state's individual market next year is 12 percent to 13 percent.
"We are seeing a negative trend in that we are seeing increases instead of decreases as a result of this new system of health insurance," Donelon, a Republican who opposed the federal law, said this week.
The federally run marketplace offers health insurance options for people who don't get insurance through their jobs or a government program such as Medicare. Subsidies are available to low- and middle-income families to help cover costs.
In Louisiana, 101,000 people signed up for private plans through the open enrollment period that ended earlier this year, according to federal data.
Donelon's department didn't have data to compare the 2015 rate hikes to previous year increases. But insurance officials say the increases are larger than the price hikes enacted annually before the federal law was put in place.
"Prior to the implementation of the law, increases mirrored health care trend, which was in single digit increases," said John Maginnis, spokesman for Blue Cross and Blue Shield of Louisiana, the largest provider of insurance offerings on the federal marketplace for Louisiana.
The U.S. Department of Health and Human Services said the rate hike requests are preliminary and could be reduced before they take effect. The agency also said it expects competition to increase in the online marketplace over time, which could help stabilize rates.
The highest rate hikes proposed for the individual marketplace are from Blue Cross, the largest health insurer in Louisiana. The company's double-digit planned increases top 18 percent and involve policies covering 52,000 people.
"The Affordable Care Act expanded access to insurance for millions of Americans, regardless of their age or health status, and guarantees richer benefits. These things come at a cost," Maginnis said.
But he noted the company has other insurance plans that have no rate increase or have smaller price hikes planned for 2015.
"Starting Nov. 15, if people don't like the rate increases, they can always shop around," he said.
The cost of the rate hikes will be shared between the individual and the federal government, through subsidies. Eighty-eight percent of the Louisiana people who bought health coverage through the marketplace received subsidies to help cover costs.
In addition to Blue Cross, two other companies offering insurance through the marketplace are planning double-digit rate hikes.
The Louisiana Health Cooperative is raising rates by more than 10 percent for policies that cover about 2,000 people. Humana, which offers coverage through the marketplace only in Jefferson Parish, is planning to increase prices by more than 15 percent for individual market policies that cover more than 4,900 people.