Delaware health insurers seek double-digit rate hikes

DOVER — Citing higher cost of care, Highmark Blue Cross Blue Shield of Delaware, Aetna Inc. and Aetna Life are pushing for double-digit rate increases in health care premiums for people enrolled in the state’s marketplace.

Created by the federal Affordable Care Act, also known as Obamacare, the marketplace began Jan. 1, 2014, and has seen 28,256 people sign up for 2016 coverage.

The Delaware Department of Insurance announced the proposed jumps Thursday. New rates will take effect Jan. 1, although the exact changes are yet to be determined.

Karen Weldin Stewart

Karen Weldin Stewart

Highmark, which covers the majority of Delawareans enrolled through the state’s marketplace, is seeking increases of 32.5 percent in the individual market. Nine plans would be affected, with rate changes from 24.2 percent to 35.8 percent, according to a filing from the company posted online. The company said 11,629 people would see higher premiums as a result.

Aetna requested an increase varying from 19.5 percent to 30.7 percent for 12 plans, with an average change of 25 percent. A total of 1,531 people would be impacted.

Aetna Life’s proposal would raise rates for its customers 23.9 percent on average. Twelve plans covering 2,084 people would see the jump, which ranges from 18.8 percent to 24.8 percent per plan.

For the small-group market, Highmark is after a 2.7 percent increase, Aetna asked for an additional 23.2 percent and Aetna Life seeks 18.6 percent more.

The requests are larger than the raises approved for 2016.

In a filing with the Department of Insurance, Aetna Inc. said the cost of pharmacy scripts has risen by 9 percent while inpatient facility visits cost 6 percent more over the past year.

“Medical costs are going up and we are changing our rates to reflect this increase,” the submission says. “We expect medical costs to go up 11.0 percent excluding the effect of benefit or cost sharing changes. Medical costs go up for two reasons — providers raise their prices and members get more medical care.”

The companies also cited an aging population and the end of the federal government’s Affordable Care Act Reinsurance Program. They pledged to combat cost increases where possible.

Highmark spokesman Matthew Stehl said in a statement “it is critical that our rates accurately reflect the true costs of insuring our ACA members.

“We set our rates based on what it costs to insure our ACA members, and we filed rates that are required to make our offerings in the ACA market sustainable. Last year alone, we paid $1.19 in claims for every $1 in premiums. This is not sustainable.

“We continue to see higher utilization among our ACA members. Our ACA population is 7 years older than the average commercial member. ACA members are 34 percent more costly for in-patient services, with similar higher cost for prescription and outpatient services.”

The Department of Insurance will hold three public hearings this month to allow Delawareans to provide comments.

“These large rate increase requests are occurring in many states across the country, and I know they will be a burden for many Delawareans,” Insurance Commissioner Karen Weldin Stewart said in a statement. “The proposed increases are substantial and I’m going to do my best to reduce them. As is the case with every rate request I receive, I am instructing my actuaries to aggressively examine Highmark’s and Aetna’s supporting data for their requests.”

The department will examine the requested rates, and Commissioner Stewart will submit a proposal to the federal Centers for Medicare & Medicaid Services for approval.

The U.S. Department of Health & Human Service released a statement Thursday noting the rates are not final.

“Consumers in Delaware will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just 7 percent, from $140 to $150 per month, despite headlines suggesting double-digit increases,” HHS spokesman Jonathan Gold said.

“People in Delaware understand how the Marketplace works, and they know that they can shop around and find coverage that fits their needs and budget. In fact, last year more than 30 percent of them did exactly that by switching plans to save money. In addition, the vast majority of consumers in Delaware qualify for tax credits that reduce the cost of coverage below the sticker price. Today’s announcement is just the beginning of the rates process, and consumers will have the final word when they vote with their feet during Open Enrollment.”

Open enrollment for 2017 marketplace plans begins Nov. 1.

For more information, included a schedule of public hearings, visit www.delawareinsurance.gov/departments/rates/ratefilings.shtml

Reach staff writer Matt Bittle at mbittle@newszap.com

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