19 PPACA exchange gorillas: 9 are pushing rates higher in 2015

One challenge is that the U.S. Department of Health and Human Services (HHS) and the states themselves have failed to come up with a standardized approach for presenting preliminary 2015 rate information. Developers of the Patient Protection and Affordable Care Act (PPACA) hoped the PPACA exchange system would provide the kind of transparent market for health insurance that a stock exchange provides for stock.

In the real world, some states that purport to be enthusiastic supporters of the exchange system, such as Minnesota, have provided no 2015 preliminary rate information. Some states that present themselves as opposing the exchange system, such as Michigan, have posted clear, easy-to-find charts neatly summarizing their states’ proposed 2015 rate changes.

See also: ‘Special’ health sales a mystery.

Why are the gorilla plans’ rates going up?

Some states give consumers access to complete rate filings. QHP issuers seem to be assuming that increases in the cost of medical care will be low both this year and next year, and that enrollee use of care will be just a little higher in 2015 than in 2014. A bigger factor may be scheduled shrinkage of the PPACA reinsurance program. The temporary program is supposed to help PPACA-compliant individual plans cover the claims of patients with big bills.

This year, the PPACA reinsurance program is supposed to pay 80 percent of eligible bills from an attachment point of $45,000 up to a maximum of $250,000. Next year, the attachment point is supposed to increase to $70,000, and the percentage covered is set to fall to 50 percent. Actuaries are predicting the reinsurance program shrinkage will reduce incoming cash flow by an amount equal to about 2 percent to 5 percent of premium revenue.

See also: Aetna may get $50 million in PPACA reinsurance money.

The data

Here’s the chart we created using state 2015 rate announcements, state insurance departments’ rate filing search tools, and, in one case, a health insurer’s press release.

We got the high-end and low-end rate change numbers we used for the last column — “Where the gorilla is moving prices in its market” — from a database created by analysts at PricewaterhouseCoopers. 

We classified a state as moving prices in its market up if its proposed rate change was within about 2 percentage points of the highest increase proposed in its market, and we classified a state moving prices in its market down if its proposed rate change was within about 2 percentage points of the biggest cut or smallest increase proposed.

We classifed the other states as being in the middle of the rate mix in their markets.

See also: Medical cost trend may creep up in 2015.