The Big Rate Increases Are Coming a Year Early
The Obama administration has posted the 2016 rate increases in excess of 10% that the Obamacare health plans are requesting.
There are a lot of them.
All of the federally run states have been posted and some for the state exchanges as well. Both California and New York do not have their rates on this site yet.
Some will quickly argue that many of these rate increases are subject to regulatory approval and can be rolled back. That's right. But this year the health plans have hard claim data to show the regulators and a 35% rate increase is hardly going to be rolled back to 5%.
Big rate increases like this are driven by a lot of claims experience––a lot of really lousy claim experience.
You will also notice that this list most often includes the big market share players, such as the Blues plans, in each of these states. These are the players with the best data.
That these big rate increases are coming a year before the "3Rs" reinsurance program is to end, that was supposed to subsidize the health plan's high claims experience, is not good news.
You can access the administration's website and look at all of them by state here.
To quickly see all of the 10%+ rate increases in a particular state just click on the state and enter a date range of 01/01/2016 to 01/01/2016. Leave the company field blank.
If you leave the dates blank, you can see the carriers' rate submission history since 2013. It's interesting to see what a particular carrier increased rates at the time of Obamacare's original launch and what they have layered on to costs since.
If you click on the company name on the left side, you will see a brief description of their justification for the rates.
For example, Blue Cross of Texas commented that it covered 730,833 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 more than $400 million. And, they are only asking for a 20% rate increase.