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Aetna Seeks Health Insurance Rate Hikes In Pa.

By Alex Nixon, The Pittsburgh Tribune-Review
McClatchy-Tribune Information Services

Nov. 20--Aetna Inc. is proposing to increase health insurance rates for more than 15,000 Pennsylvania small businesses and about 150,000 of their employees.

In the request that Hartford, Conn.-based Aetna filed with the state Insurance Department and U.S. Health and Human Services, rates would rise an average 14.4 percent to 17.9 percent, depending on the type of plan.

If approved, the rates would take effect on Jan. 1 and affect people who get coverage through companies with 50 or fewer employees. Aetna is the nation's fourth largest health insurer by revenue.

The state Insurance Department can approve, modify or deny Aetna's rates but must do so by Jan. 1, or the increases automatically take effect.

"We are definitely looking at this," said Peter Camacci, director of the department's health bureau.

In its filings, Aetna said, "Medical costs are going up, and we are changing our rates to reflect this increase. We expect medical costs to go up 9.8 percent. We expect half of the medical cost increase to come from providers raising prices, a third to come from members getting more care, and the remaining portion to come from cost sharing that does not increase as quickly as medical costs."

Aetna cited examples, including a 13 percent increase in the daily cost of hospital stays and a 34 percent increase for laboratory visits.

Higher rates are proposed for its Small Group QPOS, Small Group PPO and Small Group HMO plans.

The QPOS, or Quality Point of Service, plans are similar to HMO, or managed care, plans and cover 141,000 of Aetna's small business members in the state. The average increase proposed for QPOS plans is 16.5 percent, Aetna said.

The increase would generate about $114 million a year for Aetna and affect 15,000 companies, according to the state Insurance Department.

Aetna last year reported corporate revenue of $33.8 billion and net income of $2 billion.

Small Group HMO plans, which have 1,000 members in the state, could increase 14.4 percent. The 8,000 members of Aetna's Small Group PPO plans could pay 17.9 percent more.

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Aetna noted that rates could go up and others could go down for individual businesses, depending on characteristics of their employees.

"The exact rate change will depend on what benefit plan the group chooses, when the group's contract renews, the age, gender and family size for enrolling employees, and where in Pennsylvania the group is located," Aetna said.

Aetna was required to file with the federal Department of Health and Human Services because it requested increases above 10 percent. Under federal health care reform, insurers wanting to raise rates by more than 10 percent on individuals or small businesses must justify in writing why they need the increase.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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(c)2012 The Pittsburgh Tribune-Review (Greensburg, Pa.)

Visit The Pittsburgh Tribune-Review (Greensburg, Pa.) at www.pittsburghlive.com/x/pittsburghtrib

Distributed by MCT Information Services

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