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May 13, 2016

Health insurers seek double-digit rate hikes in Maine's ACA exchange

The insurance companies offering health care plans through the Affordable Care Act Marketplace in Maine have all filed double-digit rate hike proposals in the individual market for 2017. Approximately 84,000 people are receiving coverage through Maine's health insurance exchange, with 30% of the enrollees being new to the exchange for 2016 and 87% are receiving premium subsidies to offset the cost of their plans, according to healthinsurance.org, an online resource providing information about health insurance for consumers.

In rate filings released this week by the Maine Bureau of Insurance for the individual market, Lewiston-based Community Health Options is requesting an average 22.8% hike, followed by Harvard Pilgrim Health Care at 18.7%, Aetna Health at 14.2% and Anthem at 14.1%. Harvard Pilgrim has a separate filing for a 24.4% rate hike for an off-exchange individual plan with a very small number of customers. Each insurer's average rate may be higher or lower than the rates requested for the various types of individual plans being offered on the ACA exchange, which are tiered according to premium costs and other variables.

In small group rate filings, Aetna Health is seeking a 12.9% average increase; Aetna Life, 15.8% hike; Anthem, 8.1% hike; Community Health Options, 3.4% decrease; Harvard Pilgrim, 7.6% hike; and United HealthCare, 4.1% hike.

The rate hikes are not unexpected, given the widely reported experiences of insurers both large and small losing money in the ACA marketplace during 2015, a trend that was expected to continue this year due to the fact that 2016 rates were proposed and approved before those insurers fully knew whether their premiums were sufficient to cover claims submitted by people who had previously been uninsured or underinsured and whose health needs therefore were largely unknown.

"The filing of rate information by the insurance companies is really the start of the review process for the bureau," Doug Dunbar, spokesman for Maine Bureau of Insurance, told Mainebiz in an email about the filings. "The process will be ongoing for some time. The bureau anticipated higher rate increases than in the past few years, for a few reasons: 1.) The federal reinsurance program will not be available to impact (lower) rates for 2017; 2.) Medical costs continue to rise. 3.) As demonstrated by Community Health Options, the insurance utilization experience of new policyholders — some of whom have been previously uninsured — has been somewhat difficult to predict in these initial years."

In documentation accompanying its rate filing, Community Health Options explicitly cites its 2015 individual claims experience, stating: "The main driver of the proposed rate increase is the adverse experience compared to that anticipated in the original rate development. The rate adjustment due to the adverse 2015 experience is 16.7%."

Community Health Options, in its filing, reported having 58,743 individual policyholders and 16,921 group policy holders in Maine's ACA marketplace.

In its documentation, Aetna cited the "continued increase in the cost of health care" as the primary driver of its rate increase request.

"This is driven by increases in the price of services … primarily from hospitals, physicians and pharmaceutical companies, coupled with increases in the consumptions of services, or utilization, by members," the company reported in its filing, singling out "costs associated with Hepatitis C and compound drugs" as factors in rising health care costs.

Read more

Maine's ACA enrollment up 12.37% over 2015

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