Some Insurers Seek Steep ACA Premium Hikes
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This is Your Money Matters from The Wall Street Journal.
Welcome to Your Money Matters. I'm Charlie Turner in New York. As health insurance companies prepare to set their rates for the coming year, many people that they cover could soon receive some bad news. According to new federal data, major health insurers in some states are seeking increases as high as 30 percent or more for premiums on 2018 Affordable Care Act plans. It comes as companies try to anticipate policies that haven't been set yet by Congress or the Trump administration. Joining us from Los Angeles is Wall Street Journal reporter Anna Matthews. Anna, what is the exact reason that companies are seeking these premium increases?
Well, there is a mix of reasons. Some of it is, in some cases, that companies are still losing money on the Affordable Care Act exchange plans that they sell in certain states. But a lot of the increases are due to, or at least partly due to, uncertainty about key questions about the future of the ACA, particularly certain payments that the Trump administration has threatened to halt.
Why are some insurers requesting 30%+ premium increases for ACA plans?
Right. So at this point, insurers and their customers have to be more worried about the White House than about Congress since the drive to repeal the Affordable Care Act has stalled.
Well, it's really up in the air. There are efforts in Congress, some bipartisan groups of senators and representatives who have said they want to pass legislation aimed at stabilizing the exchanges. If they did that, it would probably bring down premiums maybe even for next year, although time is getting short.
Which states are big insurers seeking 30% hikes?
Well, we should say that some of these still could change. These weren't final numbers we were looking at. But some of the rate requests that were in the neighborhood of 30% or higher were in Wyoming, South Carolina, and Iowa.
And this was according to data by the Department of Health and Human Services?
Yes, the Department of Health and Human Services released rate increase request percentages, although, again, these were preliminary requests that may have changed even since then.
And in other states, insurers are seeking premium hikes of at least 20%?
There are a number of insurers in a number of states that are seeking 20% or higher, and that's much more common than the higher than 30% figures. But there are also states where insurers are seeking far smaller increases, though, again... Because of the uncertainty, some of those insurers looking for limited increases are now refiling and saying, due to the uncertainty, they actually will need a bigger rate hike to build an extra margin for the danger of losing these federal payments.
And we should be clear, what is the deadline for insurers completing their rates?
August 16th, mid-August, they have a federal deadline. Although... I have to say, in the past, there have been instances where the federal government has granted some flexibility around deadlines when states and insurers were dealing with a lot of uncertainty. So although that is the deadline, and I'm not aware that it has been waived, there are already a couple of states where I think there have been some extensions granted.
Okay. Well, that's the deadline. When would I, as a customer, receive news about whether my rates are going to go up?
Well, we should make sure that people understand that these rates we're talking about are only on the plans sold under the Affordable Care Act, typically through the exchanges established by the Affordable Care Act. We're not talking about a plan that you get through your employer, and we're not talking about a plan that you might buy to cover your small business employees or yourself as a small business owner. This is strictly... individual insurance plans, which is, frankly, a small or a limited percentage of Americans, a small percentage of Americans get coverage that way. They will probably find out in October. That's, I think, when rates and plans will be posted ahead of the open enrollment period, which begins in November.
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