3 reasons insurance premiums won't 'skyrocket' next year


Despite what some media reports have to say, health insurance premiums won't "skyrocket" next year, according to an article by ConsumerReports

Why? For one, "some states are using regulatory mojo to roll back outrageous requests," the article said.

"Some states have the authority to review rates, and do," Betsy Imholz, a health insurance expert for Consumer Reports, said. "In other states there have been negotiated reductions." 

In Oregon, for instance, average 2015 premiums came in lower than 2014 rates after regulators got done with them, according to Oregon.gov. In Maryland, CareFirst, the state's dominant insurer, asked for a 23 to 30 percent increase, but was granted increases of 10 to 16 percent, The Washington Post reported.  Rates are decreasing for other insurers, ConsumerReports said.

WellPoint surprised industry experts earlier this year when it announced it will likely seek "double-digit plus" rate hikes, FierceHealthPayer reported in March. Rate hikes will vary in 2015 from region, state and insurer, and are likely due to federal delays and changes to the healthcare reform law.

The other reasons ConsumerReports cites for lower 2015 premium hikes include:

Polls show single-digit increases: In 31 states and the District of Columbia, the average rate increase is 8 percent, according to the most recent (Aug. 15) update of PricewaterhouseCooper's interactive map

But these rates reflect what insurers have requested, not final rates. In the three years before the Affordable Care Act was passed into law, the average rate increase in the individual market was 10 percent or more, without the ACA requirement to take on sicker populations.

Premium subsidies protect most from big rate hikes--but with a catch:  Nearly nine of every 10 people buying insurance through a state marketplace in 2014 qualified for a tax credit to offset the cost of their premiums. The formula used to calculate those credits guarantees that people with incomes under 400 percent of the Federal Poverty Level will have their rates capped. But there's a catch. The formula for determining a subsidy is based on the premiums for "benchmark" plans, which is the second cheapest Silver plan available, according to ConsumerReports.

To learn more:
- read the ConsumerReports article 
- see the Oregon.gov statement on 2015 rates
- check out The Washington Post article about Maryland rate hikes
- here's the interactive map

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