Health Premiums In Pennsylvania Rise 12%

The nearly 440,000 Pennsylvania residents who bought health insurance through the federal marketplace experienced a bit of sticker shock this year.

Their premiums rose 12 percent, or three times the national average of 4 percent, according to a new report from the U.S. Department of Health and Human Services.

But, federal officials say, that's probably better than people expected after insurers here asked to raise premiums by up to 60 percent.

The new data comes amid growing concerns about the future of the federal marketplace set up under President Barack Obama's health care law, after the nation's largest health insurer - United Healthcare --pulled out citing losses.

United's exit intensified concern that enrollees - including about 17,400 Lancaster County residents - could be negatively affected if more insurers decide to leave the marketplace or if rising premiums led to people dropping coverage.

The new federal report, in response to those concerns, shows that a large chunk of federal exchange enrollees received federal subsidies to help pay the premiums.

The report shows that this year, 76 percent of Pennsylvania enrollees qualified for federal subsidies averaging $251 a month, which brought their out-of-pocket premium cost down to $145 a month.

Last year, 80 percent of Pennsylvania enrollees qualified for premium subsidies averaging $226, with $129 in out-of-pocket costs.

The out-of-pocket cost here was higher than the national average.

Nationwide, the average out-of-pocket premiums for subsidized enrollees rose from $102 to $106 per month.

The 12-percent premium increase that residents here saw pales in comparison to the rate increases sought by insurance companies.

Six Pennsylvania insurers initially requested rate increases of more than 25 percent for individual plans in 2016, but the state insurance department granted only smaller amounts that kept the increases on all but two plans below 22 percent.

In addition to regulatory action, federal officials said, other factors that kept increases down were corresponding increases in federal premium subsidies, and the fact that the marketplace encourages enrollees to shop around for the best deal.

Highmark, the largest insurer in Pennsylvania, shed half of its individual enrollees after it reported losing close to $600 million on those plans in 2015, in part because promised federal reimbursements didn't materialize.

But Neil Deegan, Pennsylvania State Director for Enroll America, said he expects Pennsylvania's insurance market to remain stable and robust.

"We have 13 insurers statewide offering an average of 32 plans per county for Pennsylvania consumers to choose from," he wrote in an email. "Thanks in part to the wide range of options available and the fact that four out of five Pennsylvanians are receiving financial help, we're confident that consumers will continue to be able to find quality, affordable health coverage in the years to come."

Antoinette Kraus, executive director of the Pennsylvania Health Access Network, also expressed optimism but said it's important "that the Pennsylvania Insurance Department continues to be aggressive in combating rate increases to protect Pennsylvania families from unjustified and unnecessary rate hikes."

Initial rate requests for 2017 plans offered in Pennsylvania will be unveiled May 25, but the final approved rates won't be available until mid-October.

Credit: HSTAUFFER@LNPNEWS.COM