Big changes are coming to your health insurance premiums this fall. If you purchased a plan under The Affordable Care Act (ACA), your premiums are likely going to rise significantly unless you switch plans.
About 10 states have filed their proposed insurance rates for 2015 and the numbers might scare you: In 9 out of 10 states, the largest health insurer wants to increase premiums between 8.5% (Anthem Inc – Virginia) and 22.8% (Carefirst BlueChoice – Maryland). (Wall Street Journal)
This pull away from initial affordable pricing for the bigger carriers goes along with increasingly expensive medical costs and higher competition resulting from the implementation of ACA. Additionally, some big insurers that sat out 2014 will enter new markets in 2015. For example, United HealthCare is planning to enter the markets in Washington, Michigan, Rhode Island, and Connecticut next year.
Why are all the big carriers raising their premiums? Well, the answer is relatively simple. In the first year of enrollment under ACA, the insurers with the largest enrollment happened to offer the lowest prices for coverage in the first year of the health exchanges. Now, with so many enrolled in these programs, these carriers feel that they have an opportunity to raise their rates – roughly 10%, on average.
One example of this is Moda Health Plan Inc in Oregon state. During the first year of ACA enrollment, Moda managed to grab roughly 75% of the plans sold in the state. Now, Moda proposing a 12.5% rate increase for 2015.
But there is some good news! Many insurers are looking to grab those customers that big insurers like Moda will likely lose when they raise their rates next year. This means that many smaller carriers will start slashing rates to draw in more enrollees. For instance, Moda’s $221 Silver plan is proposing an increase to $249, while a new carrier, Oregon’s Health CO-OP, is planning to offer a $228 Silver plan. With mid-range, Silver plans (which cover 70% of medical costs) being the most popular choice for consumers, this will offer enrollees a new opportunity to keep lower rates through the exchanges in 2015.
There are many explanations for why insurers want to raise their rates. From rising prescription drug costs to inflation, carriers say that premium increases are justifiable. Opponents of ACA claim that the law itself is responsible for driving up costs, while supporters of the law have shown evidence that rates were already rising for those who purchase policies without the help of an employer before ACA passed.
Nonetheless, there is one big deciding factor for how health insurance enrollments will take shape next year. Depending on how the Obama administration structures the re-enrollment process for those who purchased coverage in 2014, they may make it easier for current customers to skip many of the steps they had to take for their initial enrollment which may mean that more customers will keep their current plans.
What is your game plan? To find out what your money-saving options are for 2015, call your local expert at ERM Insurance Brokers! (949) 222 – 0444