There’s a battle brewing behind the scenes to keep health plans affordable for consumers. The Obama administration weighed in this week, sending letters to insurance regulators in every state and Washington, D.C., that ask them to take a closer look at rate requests before granting them.
Under the Affordable Care Act, state agencies largely retain the right to regulate premiums. So far only a handful have finalized premiums for the coming year, for which enrollment begins in November.
In the administration’s letter Kevin Counihan, the CEO of the federal health exchange, HealthCare.gov, said recent data suggest that rates shouldn’t be allowed to go up as much as some insurers are proposing for plans sold to individuals on the health exchanges.
In Maryland, for example, the dominant insurer on the exchange, CareFirst, is asking for a rate increase of 30 percent for some of its plans. In Kansas, Blue Cross and Blue Shield of Kansas is seeking increases averaging 37 percent.
Still, wrote Counihan, “many issuers are reporting a decline in pent-up demand for services,” which would support lower premiums. The letter also said that health care costs are not growing as fast as some had predicted, “even accounting for rapid growth in pharmaceutical costs.”
Several recent studies bolster the administration’s case.
An analysis of proposed rates by the consulting firm Avalere Health found that for a 50-year-old nonsmoker, premiums for the lowest-cost silver plan will rise by an average of 4.5 percent in the eight states they studied. Average premiums for the second-lowest silver plan will rise by only 1 percent. (Most analyses of premiums look at silver-level plans because they have been by far the most popular, attracting more than two-thirds of those who have signed
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