Health insurance experts say it’s tough to draw broad conclusions about prices from the requests released Monday. The health care law only requires insurers to report proposed hikes of 10 percent or more. That’s only a partial picture of the market that tilts toward a worst-case scenario.”It’s hard to generalize, but that said, I think all signs are pointing to bigger premium increases than in 2015,” said Larry Levitt of the nonpartisan Kaiser Family Foundation, a clearinghouse for information on the health care system.Levitt said part of the reason is that insurers will be basing their 2016 premiums on a full year’s worth of cost or claims data. That’s the first time that has happened for plans sold on the overhaul’s public insurance exchanges, which started enrolling customers in the fall of 2013.
As the story notes, it’s still early going and more rate filing data will be needed over the coming weeks to ascertain exactly where the individual market is headed for plan year 2016. But as the Kaiser Family Foundation’s Levitt points out, plan issuers now have a full year of medical utilization costs for plan year 2014 — the first year of modified community-based rating rules — to better inform their pricing for next year.
According to some insurers and analysts, plan year 2014 saw high utilization costs due to pent up demand from new plan members who had previously been denied coverage or were placed in state high risk pools under medical underwriting that was permitted prior to the 2014 reforms. That means 2014 medical utilization may have been skewed upward, consequently putting pressure to boost premium rates for plan year 2016 that could moderate in later years. Provided of course medical utilization declines to a lower level over time.
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