PPACA: Filings Shed Light on Impact

UnitedHealthcare estimates it will have to increase 2014 premiums by 1.8%, or $5.85 per member per month, to cover the baseline reinsurance amount, Hoesly says.

The current filing does not include any adjustments for the effects of the insured coverage fee or for the reinsurance fee, Hoesly says.

The current filing does include one effect of PPACA in the current rate filing.

The company says in one section of the filing, Schedule G, that it expects the addition of the PPACA women’s preventive health services benefits mandate — which requires non-grandfathered health plans to cover basic preventive services and products such as Pap smears and contraceptive prescriptions without imposing deductibles, co-payments or other cost-sharing requirements on the patients — to add 0.2 percentage points to the total small group medical cost increase trend in 2013.

Another company, ConnectiCare Inc., Farmington, Conn., has asked for a 13.5% rate increase for small group health plans that cover a total of about 52,000 people. The increase would take effect in the fourth quarter.

The company says in an actuarial memorandum that it is estimating the PPACA women’s health mandate will add about $2.50 in costs per member per month for its plans, with $1 per member per month going toward medical costs and $1.50 per member per month going toward pharmacy costs. The mandate will increase the plan’s costs by an amount equal to about 0.3% of the plan’s proposed average rate of $960.36

Aetna Health Plan Inc., a unit of Aetna Inc., Hartford (NYSE:AET), applied to increase rates 5.06% on small group plans that cover a total of about 3,300 people starting Aug. 1. The department approved an amended rate increase after asking Aetna Health Plans to discuss the effects of PPACA.

Aetna said it expects the PPACA women’s health mandate to have an impact on small group plans ranging from 1.4% of premiums to 2.6% of premiums, with a weighted average of 2%.

About 65% to 90% of the cost of the mandate could be pharmacy costs, because the mandate will require plans to cover 100% of the cost of oral contraceptives, Aetna told the Connecticut department.

The department ended up allowing Aetna to assume that the cost of the women’s health mandate will average 0.73% of small-group premiums.

Connecticut General Life Insurance Company, an arm of Cigna Corp., Bloomfield, Conn. (NYSE:CI), applied to increase rates for plans that cover 836 people 5.4% in 2013.

Jennifer Bonafilia, a compliance senior associate at Cigna, notes that the company had to hold rates steady for half a year because “internal capacity constraints brought about by the challenges of implementing [PPACA]” interfered with the company’s ability to generate rate filings.