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What 3 regulators told Congress about 2016 health rates

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Three state insurance commissioners gave three different forecasts for how the Patient Protection and Affordable Care Act of 2010 (PPACA) might affect commercial health insurance rates in 2016.

The House Ways and Means oversight subcommittee brought Mike Kreidler of Washington state, Al Redmer Jr. of Maryland and Julie McPeak of Tennessee in to talk about what they’re seeing out in the field. 

Most health insurers in most states have already filed their individual and small-group 2016 rate filings.

See also: 3 incoming Republican PPACA shapers

For a look at some of what the regulators said at the hearing, based on written versions of the testimony posted on the committee website, read on.

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1. Mike Kreidler

Kreidler, who is regarded as a supporter of PPACA and the PPACA public exchange system, said the new PPACA underwriting rules, programs and subsidies have helped reduce the number of uninsured people living in his state 40 percent since the end of 2013.

“People have access to meaningful coverage that provides critical services when and if they need them,” Kreidler said. 

Rate increase requests are at record lows, with insurers in the individual market asking for an average increase of just 5.4 percent for 2016, Kreidler said. He said about 3 percentage points of that increase is due to an assessment that will be used to cover the cost of exchange operations.

Before the PPACA changes took effect, the state had 11 health insurers in the market, Kreidler said. Today, he said, the state has filings from 17 insurers that want to sell coverage in the state in 2016.

“We are still reviewing these but it is clear that consumers will have additional choices,” he said.

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2. Al Redmer Jr.

Redmer presented a table showing the requested rate changes for 2016 which range from a reduction of 3.2 percent to an increase of 30.4 percent in his state’s individual market, and from a reduction of 16.6 percent to an increase of 14.8 percent in his state’s small-group market.

Some insurers are seeing an increase in morbidity as high as 15 percent, and the increase in medical trend, or the underlying cost of care, ranges from 3.5 percent to 7 percent, he said.

He said one concern is that stop-loss insurers are trying to lure small employers into the self-insured market, and that another concern is that, because some small employers renewed coverage early to avoid coming under PPACA rules in January 2014, many small employers are renewing coverage at the same time as individuals.

“This has created operational issues for both carriers and producers,” Redmer said. 

See also: New Maryland Administrator Named 


3. Julie McPeak

McPeak said her state now has 215,000 people in exchange plans, 65,000 people in off-exchange policies, 63,000 people in small-group policies, and 312,000 people in insured large group plans.

The average monthly premium for an exchange plan enrollee is $321, with subsidies reducing the average out-of-pocket cost for the consumer to $110.

About 128,000 residents are in “grandfathered plans,” or plans operated under pre-PPACA rules, and about 230,000 are in “grandmothered plans,” or plans subject to some PPACA rules, but not the major underwriting and plan design rules that took effect Jan. 1, 2014.

Individual exchange plan rate changes ranged from 7.5 percent to 19.1 percent this year, and the increases proposed for 2016 range from 0.4 percent to 36.3 percent, McPeak said.

For 2015, the state’s largest exchange plan issuer had “a medical loss ratio of well over 100 percent,” McPeak said.

Some plans are struggling to try to contain costs by using narrow provider networks, McPeak said.

“We continue to receive complaints from consumers who signed up for the lowest cost plan in their area who later discovered they selected a limited network plan that does not include their family physicians,” McPeak said.

McPeak also said the state helped a nonprofit health insurance cooperative that was growing too quickly this year freeze enrollment.

“Since enacting the freeze, we have fielded numerous calls from [the co-op's] policyholders and have been in constant communications with [the U.S. Department of Health and Human Services] about the complaint process,” McPeak said. “The process has not been as efficient as we had hoped.”

See also: 5 Oregon insurers under orders to raise their rates