In 2016, insurance premiums could go through the roof as big insurers across the country apply for large rate increases for their ACA plans. For example, Blue Cross Blue Shield of Tennessee, the state’s biggest insurer, wants to raise rates 36.3 percent on average. New Mexico (at a truly eye-popping 51.6 percent), Maryland, and Oregon are seeing similar big numbers. Even in states where insurers are requesting more moderate increases, the percentages are still high enough to give one pause (Michigan’s Blue Care Network, for example, wants a 10 percent bump). Only in Maine has a state’s main insurer signaled its intent to keep rates flat for 2016.
Many state regulators have the power to deny the increases if the companies don’t provide evidence that payouts have risen high enough to merit the rate increases, so not all of these requests will necessarily become reality. But experts believe that insurers wouldn’t apply for such huge increases if they couldn’t justify them. The WSJ:
David Axene, a fellow at the Society of Actuaries, said some insurers were trying to catch up with the impact of drugs such as Sovaldi, a pricey pill that is first in a new generation of hepatitis C therapies.
Mr. Axene, who helps many health plans set rates but didn’t work with the big plans in Maryland, New Mexico, Oregon or Tennessee, said insurers knew they would have to have “extreme evidence” to support their requests for the year ahead. “Somebody sincerely believed that they needed it,” he said.
If regulators agree, expect the debate over the ACA, long dormant, to come roaring back. The central problem with the ACA was always that it prioritized expanding coverage over controlling costs, and those chickens are coming home to roost. Until health care policy leaders put the cost question at the heart of health care reform, premiums will continue to rise.