Health rate filings crack open PPACA window

Insurers have already had coverage in place in markets subject to the Patient Protection and Affordable Care Act (PPACA) product design and underwriting rules, and, for the most part, the effects of PPACA on product performance are still a mystery.

Most of the publicly traded health insurers have big large-group operations, which were only minimally affected by the PPACA mandates and programs that took effect Jan. 1, 2014. Most have reported results for the individual and small-group operations much more directly affected by PPACA together with the results for the large-group operations.

Some insurers have broken out individual results, small-group results, or both, but many of those have combined the results of:

• exchange products that comply fully with PPACA;

• off-exchange products that comply fully with PPACA;

• off-exchange products that have official “grandfathered” status under PPACA, because they were already in place on March 23, 2010;

• and off-exchange “grandmothered” products that are operating under state and federal rules that give them temporary permission to avoid complying with many of the new PPACA rules.

When insurers filed their major medical rates for 2015, they mostly used actual experience data from 2013 or earlier, and theoretical projections of how experience might have looked in 2014. 

See also: Health Net: Early 2014 claims look ugly and Iowa: Health claims may also be higher off-exchange

The California Department of Insurance has drawn attention to one filing, based partly on 2014 experience data, that gives estimates for how much PPACA-related taxes and fees will cost in 2016.

We also found a filing for a group of grandfathered small-group plans in Oregon that provides 12 months of 2014 experience data.

For a look at what we could find about PPACA World in the filings, read on.

1. PPACA risk-management program costs will change.

Anthem Inc. (NYSE:ANTM) is raising rates on some grandfathered individual policies issued by the Anthem Blue Cross Life and Health Insurance Company unit by an average of 8.7 percent. The policies cover 110,000 California residents.

Actual changes would range from a decreases of 37.4 percent to an increase of 24.9 percent. The California department has called the largest increases unreasonable.

The new rates, which took effect April 1, affect about $543 million in written premium. 

A year earlier, Anthem increased on the policies 16.4 percent.

Anthem says in the rate filing that it expects the amount it pays for the PPACA reinsurance program, which is supposed to protect PPACA-compliant plans against catastrophic enrollee claim costs incurred in 2014, 2015 and 2016, to be $3.67 per member per month in 2015, and $2.29 per member per month in 2016.

The plan’s share of the PPACA health insurer tax load could eat up 3.5 percent of premium revenue.