Local health insurers sound off on rate hikes

June 23--JANESVILLE -- Mercy Health System is one of two major local health insurers who have reported premium rate increases of 10 percent or more for a handful of individual health insurance plans, according to a federal rate review database.

Janesville-based Mercy predicts a 19.3 percent jump in premium rate increases for a small group plan covered under its insurance network, MercyCare, according to a federal review. The plan covers about 350 people, mostly workers for a number of small local businesses, MercyCare said. The rate hike will go in effect in January.

The plan covers just a fraction of the 40,000 people MercyCare officials say its insurance network serves, according to Pat Cranley, vice president of MercyCare Health Plans.

However, the rate hike covers more than one-third of the 1,000 people Mercy began insuring in 2014 under plans it offers through Wisconsin's Affordable Health Care exchange, the state insurance market designed to comply with the federal Affordable Care Act.

The Affordable Care act is the sprawling health care reform law put in place in 2011 that proponents say aims to help provide affordable health care and insurance to more people.

Mercy is one of seven insurance companies in the state projecting rate increases greater than 10 percent next year for individual and group policies listed under the state exchange, federal records show. One company, Wisconsin Physicians Service Insurance, projects a 32 percent increase next year on an individual health insurance plan.

Dean, another major insurer that covers the local health care market, rolled out rate increases between 10 and 14 percent or higher for seven of its state exchange plans, mostly plans that cover a small number of individuals or small employee groups, according to federal records. Company analysts weren't available to give details about the changes, which went in effect earlier this year.

The advocacy group Citizen Action of Wisconsin, estimates that Wisconsin residents with health insurance could see premium rate increases of 4 percent to 17 percent statewide in the next few years. The group put those numbers out in an April report.

The report was based largely on rate filings required under federal law for insurance plans with predicted rate increases in excess of 10 percent, rather than an average of all rate increases.

But the group's report points out trouble spots and volatility with the markets set up through the state's health insurance exchange.

Mercy didn't provide figures for overall changes in its insurance rates, but Cranley said MercyCare anticipates a nearly 9 percent decrease in rates on policies it offers through the state exchange, including an 8.5 percent decrease through a single-coverage group with 900 people.

Those figures doesn't show up in federal rate reviews because the reviews only list large rate increases, Cranley said.

Cranley acknowledged a 19 percent increase for one of its plan is "fairly sizable," yet he said people insured under that plan will see varied impacts, in part because the plan has a wide variety of policies with different structures, benefits and a range of ages for the policies' users.

Cranley said big rate hikes for some policies are coming as health insurers statewide continue to adapt to coverage and costs tailored to policies they offer under the state exchange, through the Affordable Care Act. Some rate increases now are offsetting a wildcard in cost for those newly enrolled in coverage or those who have coverage to plans under the state exchange.

Some of those people, Cranley said, might have been uninsured or under insured before, and might have deferred treatment for serious health conditions.

"What's happening right now is that the sicker groups and the older groups are migrating to ACA (exchange) plans, and the risk is getting unequal between groups," Cranley said. "ACA is not new, but we're still transitioning. Everyone is. It's a little more volatile than you would expect."

Private insurers' rate increases are now becoming public record because federal law requires health insurers to file reports on insurance plans--including those offered through the Affordable Health Care exchange -- that could have premium rate hikes of 10 percent or more.

Since 2014, the state has seen 176 filings for increases in excess of 10 percent for policies that aren't in full compliance with the Affordable Care Act, and it has seen about 52 filings for increases of 10 percent or more for policies that operate fully under the state exchange.

In Wisconsin, those rate increases are reviewed by a panel of governor-appointed analysts in the state Office of The Commissioner of Insurance, the agency that has regulatory oversight of the insurance industry.

The idea is to offer more transparency in how health insurance groups set costs that could end up being charged back to those insured.

Citizens Action, the group who published the April rate increase report, is lobbying for the state to begin accepting increased federal money that would subsidize the state-run Medicaid program. That, Citizen Action argues, would cut the number of aging people migrating to private coverage, one factor the group blames for insurance premium increases.

The group also is pushing for more transparency and stiffer state rules in how health insurance rate increases are reported and regulated.

In the four years the Affordable Care Act has been in place, the state review panel has not flagged any health insurance rate increase as excessive, although some increases have exceeded 30 percent, according to filings.

J.P. Wieske, a spokesman for The Office of the Commissioner of Insurance, didn't dispute Citizen Action's statewide averages on insurance rate increases.

But he pointed out that individual rate filings don't show the overall impact of premium increases on people with policies are under affected plans. The totals are based on aggregate increases that have different impacts on layers of policies within a plan.

"That increase isn't necessarily what everybody pays. It's an average of averages of averages, so to speak. Calculations based on a lot of (tiers) of coverage, he said.

Cranley said MercyCare's proposed 19.3 percent rate increase is for a small-group health insurance policy that covers employees for a number of local small businesses, each with fewer than 50 workers.

In its rate filing, MercyCare said it's taking no increased profit from the rate increase. The hike is intended to get the affected plan in line with healthcare costs, some of which are from providers outside Mercy's own hospital network, Cranley said.

He said some plans on the state exchange aren't renewable, meaning policy memberships could get reset at some point and pooled together, and that could level off the volatility, Cranely said.

Meanwhile, ranks of those on plans through the state's exchange could grow.

In Wisconsin, employers considered small businesses--those with 50 or fewer workers--aren't required to offer health care coverage, although some do, and some use the state health insurance exchange.

Next year, employee groups of fewer than 100 workers can be considered small businesses.

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