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Many May Find Unpleasant Surprise on HealthCare.gov: High Rate Increases

The New York Times logo The New York Times 10/31/2015 By ROBERT PEAR and ABBY GOODNOUGH

WASHINGTON — In Tennessee, the state insurance commissioner approved a 36 percent rate increase for the largest insurer in the state’s on-line individual marketplace. In Minnesota, officials approved increases averaging 49 percent for Blue Cross and Blue Shield of Minnesota, the largest insurer in the market.

Health insurance consumers logging into HealthCare.gov on Sunday for opening day of the Affordable Care Act’s third open enrollment season may be in for sticker shock, unless they are willing to shop around. Federal officials on Friday acknowledged that many people would need to pick new plans to avoid substantial increases in premiums.

But, they said, even with a number of companies leaving the marketplace for health insurance under President Obama’s signature health care law, most people around the country will still be able to choose from three or more insurers in 2016, federal officials said on Friday.

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“Shopping can save you money,” said Richard G. Frank, an assistant secretary of health and human services, who unveiled a huge collection of data on health plans that will go on sale on Sunday in the 38 states served by HealthCare.gov.

Consumers have until Jan. 31 to sign up, but must do so by Dec. 15 to obtain coverage starting on Jan. 1.

Mr. Frank, on leave from his position as a professor of health economics at Harvard, described the data in a positive light. “The Affordable Care Act,” he said, “has created a dynamic, competitive marketplace, with considerable choice and affordable premiums in 2016.”

Consumers aren’t so sure.

“It really shocks me to see these plans with $5,000 deductibles,” Belinda Greb, 56, of Vida, Ore., said in an interview. “It becomes an area of stress as opposed to making me feel secure.”

Federal subsidies for low- and moderate-income consumers will keep pace with premiums for a benchmark plan, the second-lowest-cost “silver” plan, Mr. Frank said, and consumers who choose that plan can protect themselves and their wallets.

“The vast majority of marketplace consumers receive tax credits that insulate them from premium increases,” Mr. Frank said.

A typical family of four with annual income of $60,000 will, on average, receive tax credits totaling $5,570 in 2016, up from $4,850 this year, the administration said.

But some consumers who have recently received renewal notices have been shocked at the decisions they face.

Ms. Greb said she had not been able to finish the letter she got recently from her insurer, Moda Health, because she was too upset. The letter said her current “bronze” health plan, for which she pays $213 a month after a subsidy of $175, would not be offered through the exchange in 2016. The company offered her a similar plan that would cost $265 a month if her subsidy stays the same.

The new plan recommended by Moda has a deductible, the amount she must pay for care before the insurance begins to pay, of $5,500, up from $4,250 in her current plan, she said.

“People are putting off care because of the expense,” she said.

The Obama administration said that nearly nine out of 10 consumers with marketplace coverage would be able to choose from three or more insurers in 2016. That is important, Mr. Frank said, because in insurance and other industries, “competition intensifies when there are three or more firms in a market.”

In general, he said, “places with fewer insurers have higher premiums.”

But that intensity varies dramatically. Consumers in the online marketplace can choose from 17 insurers in Ohio and Texas, 16 in Wisconsin, 15 in Michigan, 12 in Pennsylvania, 11 in Oregon and Virginia and 10 in Florida and Illinois.

But, an administration report said Friday, only one insurer is offering coverage in the marketplace in Wyoming, and consumers have a choice of just two insurers in Alaska, Hawaii, Oklahoma, South Dakota and West Virginia.

And that data, current as of Oct. 19, did not reflect the recent collapse of nonprofit insurance cooperatives in South Carolina and Utah.

Brian Forrester, 48, of Punta Gorda, Fla., said he was pleased with the outlook for his coverage next year. HealthCare.gov indicated that the subsidy for his plan, provided by Blue Cross and Blue Shield of Florida, would increase more than the premium, so he would pay less — $98 a month, rather than $107.

That, he said, is “pretty amazing.”

Mr. Forrester, a part-time driver for Uber, said he had used his insurance only to get a flu shot this year. “With my payment and subsidy,” he said, “Blue Cross will receive a little over $4,000 this year, and all they had to pay out is $12.71 to the pharmacy at Publix for a flu shot. I am the kind of customer that they want.”

Nearly one-third of people insured through the federal marketplace switched plans this year, and more will probably need to do so to avoid big price increases in 2016.

In Tennessee, the 36-percent rate increase approved for BlueCross BlueShield of Tennessee was prompted by the insurer’s assertion that it had lost money on its marketplace business because it underestimated the use of health care by its new customers.

Blue Cross and Blue Shield of Minnesota, which got an even larger rate increase, said “even with these premium increases, Blue Cross is likely to experience continued significant financial losses through 2016.”

Gov. Mark Dayton of Minnesota, a Democrat, said he was “extremely unhappy with these extremely high insurance rate increases.”

The Iowa insurance commissioner, Nick Gerhart, approved rate increases averaging 29 percent for Wellmark Blue Cross and Blue Shield, the state’s dominant health insurer, and 20 percent for Coventry Health Care. The higher rates, he said, were justified based on the plans’ experience.

Rates will rise next year by an average of just 4 percent in California, one of the few states that actively negotiate prices, state officials said. In New York, state officials said rates would increase by an average of 7 percent. And in Florida, consumers will see increases averaging 9.5 percent, the state said.

But in Hawaii, the insurance commissioner this month approved rate increases averaging 27 percent for the Hawaii Medical Service Association and 34 percent for Kaiser Permanente health plans.

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