MIAMI (AP) — Florida’s insurance officials said Tuesday that health insurance rates will rise an average of 5 to 20 percent for small businesses and 30 to 40 percent in the individual market through the state’s new exchange under the Patient Protection and Affordable Care Act (PPACA).
But officials said those increases are partly due to the fact consumers will receive more benefits, and the higher costs will be offset by federal subsidies in many cases.
Some of the state’s largest individual health insurers, including Florida Blue and Cigna, will be among 11 plans competing through the exchange in the individual market and five insurers will offer plans in the small group market. The Office of Insurance Regulation declined to disclose details of the premiums, saying the figures would be released this week. But some of the rates from individual insurers will increase as much as 80 percent.
“The potential along the continuum is very, very broad, from modest increases to fairly significant,” Florida Insurance Commissioner Kevin McCarty said during a phone interview.
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“Most people are not going to see some of the more extremes. We want to just brace people for that, particularly the younger folks, who are essentially paying for catastrophic coverage, and then gravitate to a richer benefit plan package will see that,” he said.
Under PPACA, coverage sold on the individual market has to undergo a significant upgrade. As of Jan. 1, insurers can no longer turn away people with pre-existing medical conditions, and they will be limited in what they can charge to older policy holders.
Consumers’ financial exposure will be capped. Insurers are also required to offer beefed up benefits under the plans, so while prices may increase, consumers will be getting an upgraded product. Some Florida insurers currently offer fairly skimpy benefit plans at cheap rates for catastrophic coverage, but those types of plans will no longer be allowed under the federal health law unless they meet the basic benefits requirement.
Additionally, residents making less than $48,000 a year will receive a voucher from the federal government to help offset premium costs. The less a person makes, the more the government will pay.
In general, premiums in the individual market will be higher on average, but after the tax credits, most people will end up paying less, said Larry Levitt of Kaiser Family Foundation, who commented on the exchanges in general and was not speaking specifically to Florida’s rates.