Rate Hikes For Public Health Insurance Exchange Plans Will Vary By Carrier

Analysis: Highest rate increases will be from national carriers with co-ops and Blues not far behind.

If you’re hoping to buy health benefits from the same national carrier through your state or federal health insurance exchange again next year, your premiums are likely to increase significantly more than if you’re buying them from another type of carrier.
That’s the takeaway from an analysis conducted by the McKinsey Center for U.S. Health System Reform of health insurance carrier rate requests approved by 18 states and the District of Columbia.
The median gross premium for the lowest-priced silver plan sold by national carriers over the exchanges will be 27 percent when open enrollment period for the 2017 coverage year starts November 1, according to the analysis.
Health plans sold over the exchanges, which were created by the Patient Protection and Affordable Care Act, are available at five benefit levels: catastrophic, bronze, silver, gold and platinum. Premiums vary by benefit level with catastrophic plans being the least expensive and platinum plans being the most expensive. The gross premium for each plan is the monthly premium before any income-based subsidy or tax credit is deducted from the premium.
Other types of carriers also will be raising their premiums for their lowest-priced silver plans, which are the most popular level of plan sold over the exchanges, by double digits, according to the report. The median gross premium increase for the lowest-priced silver plan sold by co-ops will be 22 percent; by Blues plans 16 percent; by regional or local carriers 13 percent; and by provider-sponsored health plans 11 percent.
The median gross premium hike by plan level, collectively by carriers, according to the analysis, will be:

  • 17.1 percent for catastrophic plans
  • 13.9 percent for bronze plans
  • 13.8 percent for gold plans
  • 11.2 percent for silver plans
  • 7.6 percent for platinum plans

The McKinsey analysis did not include rate approval information from Minnesota. Last week, however, the Minnesota Department of Commerce announced the rate increases proposed for individual health plans sold by eight carriers to state residents. The increases ranged from 14.2 percent—charged by regional carrier Medica Health Plans of Wisconsin to 49 percent charged by Blue Cross and Blue Shield of Minnesota. The state is scheduled to announce the final, approved rate increases on Sept. 30.
To learn more about the national and local trends affecting public health insurance exchanges, read “How Has Minnesota's Health Insurance Exchange Performed?” in the September issue of Twin Cities Business.