Thursday, July 9, 2015

Health Insurance Companies Seek Big Rate Increases for 2016 - How Will This Affect Health Care Businesses and Providers?

Zach Gibson / New York Times
Health care providers need to follow what is happening with health insurance companies: the mergers, the rate increases, the data issues, the complexitites. These mirror what will be happening in the health care industry as a whole. 

Reporter Robert Pear’s article in The New York Times (7/3/15) entitled “Health Insurance Companies Seek Big Rate Increases for 2016” explains how “health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected.” Federal officials say they are determined to see that the requests are scaled back.

“Insurers with decades of experience and brand-new plans underestimated claims costs. Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota." 

The Oregon insurance commissioner just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.

Jesse Ellis O’Brien, a health advocate at the Oregon State Public Interest Research Group, said: “Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money.”

Sylvia Mathews Burwell, the secretary of health and human services, said that federal subsidies would soften the impact of any rate increases. Of the 10.2 million people who obtained coverage through federal and state marketplaces this year, 85 percent receive subsidies in the form of tax credits to help pay premiums.

The good news is that there are more insured consumers. There are opportunities for health care providers and businesses. Consumers may buy catastrophic insurance to keep costs low and pay cash for everyday care where they can choose their own physicians. 

The money is going to the insurance carriers. How will the money trickle down from the carriers to the providers?  There is a pent up demand and my physician clients who provide primary care are completely overwhelmed.  This will change but it will take some years for this to adjust and the price levels to become predictable and for providers and businesses to have an idea of what life will be like in 5 years. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law


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