Will Insurance Premiums Rise in 2015?

The whole country is sitting at the edge of their seats anticipating the release of preliminary rates for 2015 health insurance premiums. For physicians, these rates may affect decisions around the way they choose to conduct business and how they strategically align themselves within insurance networks, or not, for the best possible financial outcome. Employers and individual consumers of insurance plans, unfortunately, may be looking at paying significantly higher premiums depending on their home state and circumstance.

So what do we know so far?

Kaiser Health News reports in Maryland, CareFirst is seeking to raise premiums as much as 30 percent for consumers buying individual health plans while the Kaiser Health Foundation and Evergreen Health Cooperative plans are looking to reduce premiums as much as 12 percent.

In Connecticut, healthcare advocates are requesting a hearing to explore Anthem Blue Cross Blue Shield’s proposal to raise premiums by an average of 12.5 percent next year.

According to Modernhealthcare.com another Connecticut insurer, ConnectiCare Benefits is also looking to raise premiums by an average of 11.8 percent while not for profit insurer HealthyCT wants to decrease premiums by an average of 8.9 percent in 2015.

So what will it be? Increases or decreases? Why is there so much versatility in how insurers are approaching pricing in the new year under the Affordable Care Act?

Just like any other market, insurance prices can be competitive, and when new “smaller players” enter the field, they sometimes have more room for leverage. “We’re very enthused about that new entrant,” Kevin Counihan, Access Health CT’s CEO told Modernhealthcare.com in reference to UnitedHealth Group joining the Connecticut exchange. “We believe in competition. We believe in the market. Our view is the more the merrier.”

After reviewing 2014 premiums in contrast with the 20-30 percent rate increases seen over the past few years, the Urban Institute concluded that rate increases may be moderate, “…there may be reasons to believe that premiums will increase substantially, particularly in less competitive markets, there are even stronger reasons to believe that premium increases will be moderate (in line with underlying cost growth) rather than growing by double digits,” they concluded in their report Will Premiums Skyrocket in 2015.

Additionally, with the Affordable Care Act requiring a mandatory review of rate increases higher than 10 percent, some experts say it’s unlikely premiums will rise any higher (than the 10 percent that is).

For now, it appears that mostly individual consumers of health insurance on exchange plans are going to be most widely affected by premium hikes. Which, correct me if I’m wrong, kind of defeats the purpose of “affordable” exchange plans in the first place? Perhaps there will be enough co-op and startup insurers to encourage larger Payers to price more competitively.