Alaska Announces Hefty Individual Insurance Rate Increases For 2015
By Laurel Andrews, Alaska Dispatch News, Anchorage | |
McClatchy-Tribune Information Services |
Who is affected?
Roughly 16,000 Alaskans who signed up for individual insurance plans under the Affordable Care Act will be affected by these rate increases, to varying degrees. These are Alaskans who signed up for individual health insurance after
Most of these Alaskans -- nearly 13,000 people -- signed up through healthcare.gov, the federal insurance marketplace. Of these, 88 percent qualified for federal subsidies that pay a portion of the premium costs. The remaining 3,000 Alaskans signed up outside of the marketplace and were not eligible for federal subsidies.
The more federal subsidies one receives, the less impact the increases will have.
The state says that 6,000 Alaskans who do not receive any sort of federal assistance will be hardest hit by the increases.
Among the 6,000 Alaskans who did not receive subsidies, the state has included 1,100 Alaskans who signed up outside the marketplace through insurers other than Premera or
The rate increases go into effect
What are the increases?
In 2015,
Rates for other insurers have not been finalized yet, Wing-Heier said.
What are the reasons cited for the increases?
Rates have been on the rise in
Wing-Heier said 2015's greater increase is due to the small number of Alaskans on the individual market: "For insurance to work the way it's intended ... you pool your risk and spread it across the pool."
Insurers were facing "some very horrific claims" with "just not enough people" to balance it out, she said.
"It's bothersome to all of us here," Wing-Heier said, but "in order to stabilize the market ... we have to watch what we're doing today."
"There are not enough healthy members in
In the first six months of 2014, Premera received more than
"We need a 71.5 percent average rate increase to break even in 2015," the release states. In 2015, Premera is forecasting losses of
Premera has asked the state to implement a reinsurance program, in which the state would reimburse insurance companies for losses. Those costs would be spread across the entire insured market, including large and small employers, in what Wing-Heier said would be "rearranging the chairs" but not solving the problem.
The state is reviewing the request, Wing-Heier said.
How does the state approve rates?
The state reviews insurance rates annually. "Rate filings are hundreds of pages," Wing-Heier said. "You go through this data, cost of claims, cost of expected claims ... basically look to price the product so it's not excessive but it's not inadequate."
The division approves rates based on historic results of the plan, according to Thursday's press release. Since these plans were all new in 2014, not much data yet exists. Historical data is "very, very limited," Wing-Heier said.
"We understand the data is not very credible, but it's all we have to use at this point," Wing-Heier said. "Right now we don't know if this is a trend or an anomaly."
The state can disapprove insurance rate plans, and until rates are approved, they are "quasi-disapproved," Wing-Heier said. She declined to say whether insurance companies had asked for higher rate increases, citing state statutes regarding confidentiality.
The division was also unable to provide additional reports or reviews of the rate filings, citing state statutes. No public hearings were held on the insurance rate increases, Wing-Heier said.
Why didn't the state apply for a grant to strengthen its review process?
Under the Affordable Care Act, the
Wing-Heier said the department was already adequately equipped to review rates, and the grant program allotted a specific amount that Wing-Heier said would be too much.
"We didn't know what we would do with a million dollars because we already had the resources within the department," Wing-Heier said. "To simply take taxpayer money ... we couldn't do it."
This decision has been met with criticism by some, including the federal
"Before the Affordable Care Act, Alaskans regularly faced double-digit rate increases on the individual market," HHS spokesperson
The
"
Reactions to the release
"What we're lacking is transparency about this," Johnson said. "Is this really justified? Is there another way to do it? What else is the office of insurance going to do to protect Alaskan consumers?"
In a Friday release by the
"
Similar sentiments were echoed by Alaska U.S. Sen.
"After leaving millions of dollars of federal funding on the table and refusing to accept the
Rep.
"Some will dismiss these alarming numbers as a partisan attack on the president's health care law, but I assure you, for the 16,000 Alaskans paying higher rates in 2015 for the same or worse care, it's not political, it's painful," Young said in the release.
___
(c)2014 the Anchorage Daily News (Anchorage, Alaska)
Visit the Anchorage Daily News (Anchorage, Alaska) at www.adn.com
Distributed by MCT Information Services
Wordcount: | 1347 |
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News