Florida’s Largest Health Insurer Is Raising Exchange Rates An Average Of 17.6 Percent

August 1

Florida Blue, the state’s largest health insurer, is increasing premiums by an average of 17.6 percent for its Affordable Care Act exchange plans next year, company officials say.

The nonprofit Blue Cross and Blue Shield affiliate blames higher health costs as a result of attracting older adults this year who previously lacked coverage and are using more services than expected.

Florida insurance regulators plan to release rate information for all companies next week. The exchange plans cover individuals who aren’t covered by employer-based policies.

Florida Blue offers many plans. The 40 percent of its individual policyholders who chose “narrow network” plans called BlueSelect that limit coverage to fewer doctors and hospitals will see rates rise by an average of 13 percent.

Critics of the health law have predicted big rate hikes in the second year of the online marketplaces. Florida Blue CEO Patrick Geraghty noted that premiums in the individual market have been going up for years. “In the individual market, this type of average rate increase is typical,” he told Kaiser Health News. “It’s is not aberrant.”

Next year will mark the fourth consecutive year Florida Blue has increased premiums by at least 11 percent on average for people under 65 who buy coverage on their own. Florida Blue increased rates an average of 16.5 percent in 2014, 16 percent in 2013 and 11.5 percent in 2012, the company said.

Florida Blue signed up 339,000 customers through the Affordable Care Act’s federal marketplace this year— about 34 percent of the nearly 1 million who enrolled in the state, the company said.  Florida does not operate its own exchange.

Nationally, 2015 rates that have been made public have varied sharply, with some insurers increasing rates, some reducing them and others keeping them stable.

Avalere, a consulting firm, found in June that average premiums for a 40-year-old, non-smoker would increase by about 8 percent next year, based on an analysis of “silver” plan rates in nine states. Changes ranged from a 1.4 percent average decrease in Oregon to a 16 percent average increase in Indiana.  

California officials said Thursday that more than 1.2 million consumers in the state-run insurance exchange can expect modest price increases of 4.2 percent on average next year. The Covered California marketplace is an “active purchaser” under the health law, which means it negotiated the rates with Anthem Blue Cross, Kaiser Permanente and other major insurers. The rates are also subject to review by California regulators.

About a dozen carriers will be competing in the individual health insurance market next year in Florida. Two have disclosed their rates. Humana is increasing prices an average of 14.1 percent for its HMO, while its preferred provider organizations (PPO) plan will increase 2.2 percent on average. Molina has set an 11.6 percent average rate decrease for all its plans.

Several factors related to the health law are driving up rates for next year, Geraghty said, including a paucity of younger and healthy enrollees and a greater-than-expected surge of people seeking expensive health services. The law prohibits insurers from rejecting people with health problems or charging them higher premiums. That meant that many unhealthy people who had not been able to get coverage before were able to obtain policies in 2014.

Insurers’ premiums vary by a consumer’s age, the plan they selected and where they live. The monthly premium is only one part of costs, which also include co-pays and deductibles.

Florida Blue monthly premiums this year for a 40-year-old living in Palm Beach County and buying a silver plan range from $303 to $404, according to data on healthcare.gov. That’s before subsidies, which bring down the cost for low and middle-income buyers, are included.

Geraghty said he’s unsure if the latest round of price increases will lead people to drop coverage. “It depends on how much value they place in what they are receiving,” he said.

Nearly 90 percent of Floridians who bought coverage on the exchange get a federal subsidy to lower their share of the premium.

“No one can claim in good conscience that a 10 percent rate increase or more would signal the advent of something new and unprecedented,” said Greg Mellowe, policy director of consumer group Florida CHAIN. “For years, this was standard practice in Florida.”

The Republican-dominated Florida legislature last year suspended the state’s power to review health insurers’ rates to make sure they were actuarially sound. It left that job to federal officials who run the online insurance exchange that Florida uses. The federal government, though, has no authority to force insurers to lower insurance rates.

Open enrollment to buy 2015 plans runs from Nov. 15 through Feb. 15.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

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