I have also made the argument that after two years the Obamacare enrollment is coming up way short of what it needs for us to be assured that we have a sustainable risk pool—enough healthy people signed up to pay the costs for the sick.
Instead of moderate rate increases for one more year, the big rate increases have begun. They are particularly large among the health insurers with the most enrollment—the carriers with the most data.
Texas Blue Cross stands out. The health plan commented in its federal government rate filings that it covered 730,833 Obamacare individuals in 2014 with premium of $2.1 billion and claims totaling $2.5 billion––for a medical loss ratio of 119%. The plan further commented that, after the “3Rs” reinsurance adjustments, they lost 17% to 20% of premium in 2014–that would be about $400 million. And, they are only asking for a 20% rate increase.
While we won’t see all of the rates in all of the states for a few months, some state regulators have begun to make the 2016 rate actions public:
• CareFirst Blue Cross of Maryland is asking for a 34% rate increase on its PPO plan and a 26.7% rate increase for its HMO. CareFirst has an 80% market share in the Obamacare exchange and only 30% of the eligible Maryland market has signed up on the exchange.
• In Oregon, where less than 35% of the eligible have signed up on the exchange, the biggest insurer with 52% of the market, Moda, has asked for a 25.6% increase. Lifewise, with a 19% market share, has asked for a 38.5% increase.
• Blue Cross Blue Shield of Tennessee, with a 165,000 members making up 70% of the Obamacare exchange is asking for a 36.3% increase. The second biggest player, Humana HUM -1.5%, is asking for a 15.8% increase. Less than 40% of the eligible exchange market signed up in Tennessee.
• Georgia is the second biggest Obamacare market for Humana, having enrolled 254,000 people out of a total market of 479,000, and Georgia “maybe its biggest misstep”. Its CEO has said about Georgia, “We can’t have one business being subsidized by another business.” Humana is asking for 2016 individual plan rate increases from 14.8% to 19.44%.
• In Iowa, with the lowest enrollment rates in the country, and where its biggest Obamacare insurer went broke last December, Wellmark Blue Cross, which only sells off the exchange, is asking for a 43% increase on its Obamacare compliant policies. Coventry, which has 47,000 Obamacare customers, is asking for an 18% increase for its on-exchange business.
• The Kansas insurance department has not made its rate increases public yet but has said that plans will increase by as much as 38%. Less than 40% of the eligible have so far enrolled.
• Pennsylvania is not encouraging with market leader Highmark asking for increases ranging from 13.5% to 39.65% and the Geisinger HMO asking for increases from 40.6% to 58.4%. Pennsylvania enrolled 50% of the potential exchange market in 2015.