Health exchange rates to spike for market leaders, drop for laggards in 2015

Consumers who purchased health insurance through the state and federal exchanges created by the Affordable Care Act may find their current policies less affordable in 2015. At the same time, competition among insurers is expected to heat up, with many moving into new markets and those with low enrollments cutting rates, according to an article in the Wall Street Journal.

The report was based on proposed 2015 insurance rates in 10 states scattered across the country that have completed their filings. In all of those states, the payors with the highest enrollment were those that offered the lowest prices in 2014. It is these market leaders that plan the rate increases, according to the filings.

On the low end of the proposed increases, Anthem in Virginia intends to raise rates by 8.5%; on the high end, CareFirst intends to raise rates for its BlueChoice plan in Maryland by 22.8%

Market dominance, not actuarial data, is driving the rate increases, as many patients did not acquire coverage until March of this year, the article states. Carriers with market dominance believe there is room to raise rates, analysts told the Journal.

Competition, however, is expected to rise for two reasons: many insurance companies plan to move into new markets next year, and those with low enrollments intend to drop prices.

For instance, Oregon’s dominant plan (Moda Health Plan) covers three-quarters of exchange enrollees in that state and is seeking a 12.5 percent rate increase, citing rising medical costs (trending at 5.4 percent in 2014). A nonprofit startup that enrolled just 1,000 consumers, Health CO-OP, is seeking a 21 percent rate decrease. Moda’s silver plan would increase from $221 to $249 for a 40-year-old non-smoker and Health CO-OP’s premium would drop to $228 for the same person, the article points out.

Insurers with low enrollments in 2014 or new market entrants in 2015 propose to be the lowest-rate insurers in Connecticut, Indiana, Maryland, Michigan, Oregon, Rhode Island and Washington, bringing the lowest-cost silver plans in 2015 below 2014 rates in seven states.

How the Obama administration specifies the re-enrollment process for 2015 could play a role in whether consumers plan-hop to seek the lowest prices.  If consumers can maintain their current plans without the hassle associated with 2014 enrollment, they may just stay put, the article suggests.