Rates for marketplace plans likely to spike, but subsidies will help offset rise in cost, officials say
A sampling of individual health insurance rates for Nebraskans next year shows increases that will average about 35 percent on the Affordable Care Act marketplace, with some increases near 50 percent.
But federal officials have said the law’s tax subsidies will offset such increases for three out of every four people buying the policies, allowing them to purchase coverage for $75 or less per month.
Figures issued Friday by the Nebraska Department of Insurance showed increases ranging from 12 percent to nearly 50 percent for a sampling of policies that would take effect Jan. 1.
The figures compared 2016 and 2017 rates for Blue Cross Blue Shield of Nebraska, Aetna Health Inc. and Medica, the three companies that will offer policies to Nebraskans on the exchange when open enrollment starts Nov. 1.
The figures do not apply to large-group insurance through employers or to government plans such as Medicare.
Nebraska Gov. Pete Ricketts, who favors repealing the federal health care law, issued a statement saying the rate increases “underscore the negative impact the president’s health care plan is having on Nebraska families.”
“Obamacare has not worked,” he said in an interview. “It has driven the rates up. It’s anything but affordable. It’s the unaffordable care act.”
He said the 2017 increases also show that Nebraska correctly rejected expansion of Medicaid in the state, instead focusing on other ways to improve access to health care.
Ricketts said expanding Medicaid in Nebraska is largely separate from the rate issue, although he opposes an expansion because it would go beyond the purpose of Medicaid in protecting the neediest people and would add too many people to Medicaid’s rolls.
“That’s not a solution to bringing health care costs down,” he said.
State Sen. John McCollister of Omaha said that although the rate increases and Medicaid expansion are not closely related, a recent study by the Department of Health and Human Services said that states that have expanded their Medicaid coverage have slightly lower health care costs.
That’s because doctors and hospitals in those states have less “uncompensated care,” he said.
He said about 92,000 people in Nebraska don’t qualify for Medicaid and don’t qualify for tax subsidies that would help them buy insurance on the exchange.
When those people come for medical care but can’t pay, doctors and hospitals treat them and have to pass those costs on to people who have insurance, boosting those rates, said McCollister, who intends to introduce legislation next year that would expand Medicaid in Nebraska.
The federal law sets up online exchanges where people can compare and purchase individual health insurance offered by different insurance companies. Those who qualify also receive tax subsidies that can offset part of the premiums they pay.
James Goddard, director of health care access programs for Nebraska Appleseed, said the Affordable Care Act has made health insurance possible for 87,000 Nebraskans, beyond the law’s goals set for the state. “That is a really good thing,” he said. He said the tax subsidies will continue making health insurance affordable for them.
Jerry Byers, chief financial officer for Blue Cross, said rates are increasing for 2017 because people buying insurance under the law used health care more frequently in 2015 than expected. The result: a $64 million loss for that line of business at Blue Cross last year.
“We never intend to price business at a loss,” Byers said. “We clearly have underestimated the claims experience for ACA policies in the past.” He said the 2017 rates are intended to cover costs so that 2018 and future years will not see big increases.
But he said the claims experience so far in 2016 “is running a little bit worse than expected,” which could push up rates again for 2018.
In addition to medical care costs, Byers said, expenses for health insurers are higher because of the expiration of temporary parts of the Affordable Care Act that were intended to ease the transition to the new law.
The government also could revise the law to help control costs, he said, including changes to rules for “special” enrollment periods. He said the rules let too many people buy insurance only when they need it, run up big medical bills and then cancel their coverage to avoid paying premiums.
Date: September 03, 2016