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April 23, 2014 at 12:12 PM
Brokers say health premiums are rising so sharply that, in some states, increases are in the triple-digits and overall might be among the worst yet.
And, what’s more, they blame the premium inflation almost entirely on the Patient Protection and Affordable Care Act.
The figures come from Morgan Stanley’s health care analysts, who conducted a survey of 148 brokers. On average, they said, increases are in excess of 11 percent in the small group market and 12 percent in the individual market. But some states show increases 10 to 50 times that. All of this, analysts concluded, is “largely due to changes under the [PPACA].”
Among the states seeing huge increases in the individual market, Delaware leads the pack with a whopping 100 percent increase. Following are New Hampshire with a 90 percent increase, Indiana at 54 percent, California at 53 percent, Connecticut at 45 percent, Florida at 37 percent, Michigan at 36 percent, Georgia at 29 percent, Kentucky at 29 percent, and Pennsylvania at 28 percent.
In the small group market, consumers might want to stay away from Washington. There, brokers reported a 589 percent increase. Other states suffering from skyrocketing small group increases are Pennsylvania (a 66 percent increase, California (37 percent), Indiana (34 percent), Kentucky (30 percent), Colorado (29 percent), Michigan (27 percent), Maryland (25 percent), Missouri (25 percent), and Nevada (23 percent).
Specifically, analysts said the acceleration in annual renewals is due largely to changes in the commercial market, including inclusion of the industry fee (and the gross up); 3:1 age bands; underwriting restrictions such as community rating and guaranteed issue; and new benefit designs.
This month’s results are up from Morgan Stanley’s last survey of brokers in December. Then, brokers said rates were rising in excess of 6 percent in the small group market, and 9 percent in the individual market.
