States where insurers underpriced individual plans in the early years of the federal healthcare exchanges are posting sharply higher premiums for next year, although subsidies will moderate the increases for many low- and moderate-income consumers.
Illinoisans learned Friday that people buying insurance on the state's exchange will face steep price increases for next year.
The Illinois Department of Insurance published an analysis of 2017 health plans Friday based on final price increases approved by state and federal regulators. Statewide, the average rate increase for the lowest cost "silver" plan is 45%. (Silver is a label of a middle-tier plan that's been a popular choice.)
Blue Cross Blue Shield of Illinois, with more than 350,000 marketplace customers, is increasing its individual plan rates by 51% overall. Insurers are making up for unanticipated medical and drug costs and payments from the federal government they didn't receive.
Meanwhile, a sampling of policies by the Nebraska Insurance Department reviewed by the Omaha World-Herald showed that about 82,000 Nebraskans will pay more than expected for individual health insurance next year because Blue Cross won't offer policies on the Affordable Care Act's federal exchange.
Extra increases averaging as much as 15%, on top of higher prices already set by the two remaining companies on the federal exchange, will push the premium increase to an average of nearly 41% for Aetna Health and more than 55% for Medica Health from their 2016 rates, the paper reported.
In the dozen health plans sampled by the state agency, Aetna's increases range from nearly 17% to nearly 66%. Medica's increases range from nearly 41% to more than 73%.
The increases are intended to help Medica and Aetna break even as they take over coverage for the 20,000 people covered by federal exchange health plans this year from Blue Cross Blue Shield of Nebraska, said State Insurance Director Bruce Ramge.
"We're in a very difficult situation right now with the rate increases the way they are," said Dannette Coleman, general manager of individual and family business for Medica.
However, Coleman said it's important to remember that as the premium rates go up, the tax credits and other subsidies on the exchange also increase. That means the out-of-pocket increase for the customers may be substantially less than the amounts estimated by the State of Nebraska.
Andy Slavitt, acting administrator of the CMS, which oversees the Affordable Care Act, said in a speech earlier this month that, on average, health plans on the exchange have been underpriced.
"Nobody knew what it would cost to cover sick people," he said, because people with pre-existing medical conditions were denied coverage. The Affordable Care Act ended that practice.