Large rate increases for health insurance may be in the works for some Missourians this year, but we won’t know the final prices for a few months.
Last month, insurance companies nationwide submitted their bids for rate increases. The Missouri proposals from Coventry Health Care were among the steepest, including a 29 percent hike for individual plans sold on Healthcare.gov. According to rate filings, Coventry's rate increases could affect 70,000 people.
Because the state of Missouri does not review its own health insurance rates, federal regulators will decide whether the price hike is warranted. In the meantime, members of the Consumers Council of Missouri are sending letters to the U.S. Department of Health and Human Services objecting to the increases, and asking federal officials to hold a hearing.
The Consumer Council’s president, Joan Bray, has long advocated for Missouri to implement its own rate review process.
“There’s only five states in the country that don’t have an adequate rate review process. But Missouri’s the only one that has nothing,” Bray said.
After a lawsuit brought by the Consumers Council, HHS began publishing the proposals for rate increases on its website. Only companies proposing an increase of 10 percent or higher are required to file the paperwork.
“I wouldn’t be surprised if the rate increase is higher this year. And that’s because in general health spending is starting to increase again,” said Tim McBride, a Washington University health economist.
Regulators often negotiate the rate proposals down to more reasonable increases, so speculating on the rate bids is likely premature, McBride said. (He discussed it more broadly on his blog). But he added that the market is still seeing inflation of 4 to 6 percent compared to last year.
“Coming out of the recession, the first couple years of the Affordable Care Act, healthcare inflation was about the lowest it’s been. But it’s starting to return a little more to its more traditional increases,” McBride said. “I don’t think it’s out of control yet, but we’re certainly watching it.”
Aetna spokesperson Rohan Hutchings wrote in a statement that Coventry's proposed double-digit hikes “simply reflect the costs” of doing business:
“For 2016, we expect that medical costs will grow by 8-10% in the individual market. Other factors driving rates include changes in the reinsurance program (approximately 5-6% increase across all markets), risk pool experience, and taxes and fees,” it read.
Meanwhile, health insurers have enjoyed significant boosts in their market share. Since the implementation of the Affordable Care Act, 16.4 million previously uninsured people have enrolled in health insurance, according to the federal government.
Final rate increases will be published in the fall.
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