Mixed picture

After weeks of handwringing about healthcare reform-induced “rate shock,” the actual insurance premiums proposed haven't delivered it.

But without the new restrictions imposed under the federal law, insurance regulations have varied so much from state to state that it's difficult to make broad assumptions based on the numbers.

Last week, California released proposed plans and rates from 13 carriers for 2014. For many plans, rates will be lower.

Blue Shield of California said rates for individual and small-group policyholders would rise an average of 13% next year, much less than the 30% increase projected two months ago in a report commissioned by the state's exchange, Covered California.

The average individual premium sold in California through eHealthInsurance was $177 a month, a spokesman for the online insurance broker said. In comparison, “silver” tier plans in Covered California will cost an average of $321 statewide, though those plans may have richer benefits.

Officials for the state's exchange, however, said it's more meaningful to compare the cost of individual plans on the exchange to plans sold this year to small businesses—Californians in the most populous areas will pay as much as 29% less for exchange plans. In the current small-group market, as with coverage under the Patient Protection and Affordable Care Act, insurers aren't allowed to deny coverage because of preexisting conditions.

Although 13 carriers have submitted plans, the exact number of plans was not disclosed.

The Golden State's three largest insurers, Anthem Blue Cross of California, Blue Shield of California and Kaiser Permanente, will compete for business. However, several large national insurers, including Aetna, Cigna Corp. and UnitedHealth Group, will not.

And California Insurance Commissioner Dave Jones expressed some distress about the number of carriers. “There are only three statewide health insurers selling in Covered California, which means less statewide competition than we'd hoped to see in the new marketplace,” he said in a prepared statement.

While California provides the first example of proposed 2014 rates in a large state, a handful of smaller states have also released proposed premiums for next year.

Cori Uccello, a senior health fellow at the American Academy of Actuaries, said states that already imposed the most significant insurance regulations called for in the ACA should see “stable premium changes as subsidies and income tax credits bring in a lower-cost population.” Consumers in states where this has not been the case, she added, could see “upward pressures on premiums.”

That picture is mixed in California. It already has community rating, which restricts insurers' ability to charge more based on enrollees' characteristics, but not guaranteed issue.

“Generally, rates will go up for young, healthy individuals who have been fortunate enough to be able to purchase individual products … because they weren't excluded on the basis of a medical condition,” said Dan Mendelson, CEO of Washington-based consulting firm Avalere Health. “For other people, like people with diabetes, heart disease or multiple sclerosis, rates will come down,” he said. “The (important) thing is not that rates are going through the roof, but we are taking care of each other.”

Proposed rates for 2014 in Oregon are also not as high as some predicted. After filing their proposed rates, officials at Kaiser Foundation Health Plan of the Northwest and Providence Health Plans asked the state insurance department if they could re-file with lower ones.

That request was denied, Oregon Insurance Commissioner Lou Savage said.

“What we have said to those carriers and the rest of the carriers who have filed (is) if you want to give us additional information about assumptions, we are happy to get those,” Savage said. “We have not let anyone re-file their rates,” he said, because “it would never end.”

Follow Jonathan Block on Twitter: @MHjblock