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Indiana's Obamacare rates for 2015 all over the map

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Initial 2015 premiums filed for the Obamacare exchanges in Indiana ranged from as high as a 46-percent hike to as low as a 9-percent cut.

Those are the average changes in premiums proposed by the four health insurers that sold plans on the Obamacare exchange for 2014, according to their filings this month with the Indiana Department of Insurance. Depending on the plans customers choose, the changes could be significantly more or less.

Anthem Blue Cross and Blue Shield, the state’s largest insurer, wants to raise premiums an average of 9.7 percent—which it characterized as in line with its expectations before the launch of the Obamacare exchanges. Anthem's average premium next year is expected to be $5,935 per person.

“We’re really not surprised by how the experience played out,” said Anthem spokesman Tony Felts. The average age of Anthem’s individual customers this year is 42—a bit older than it experienced before the new Obamacare rules and exchanges took effect Jan. 1. But, Felts noted, “We went to the market with pricing that reflected that view.”

Older customers caused more problems for Fort Wayne-based Physicians Health Plan of Northern Indiana, which proposed the highest average premium increases of 46 percent. Its minimum requested premium increase is 31 percent and its maximum requested increase is 59 percent.

“Emerging enrollments have proven to be significantly tilted toward older ages,” David Peppler, a PHP actuary, wrote in the company's rate increase request. “It was assumed in 2014 pricing that age mix would be similar to that of group insurance populations. … In this case, the older-than-anticipated age mix is resulting in premium deficiencies as the older-age premium adjustment factors are insufficient to provide for the full older-age morbidity.”

“Morbidity” is insurance-speak for the prevalence of disease and medical needs in a group of people insured. Of PHP’s 46-percent rate increase, 25 percentage points of it are due to higher-than-expected morbidity and 7 percent are attributed directly to age. The rest of the increase is due to higher prices from doctors and hospitals and changes in the Obama administration’s program for reimbursing insurers for their losses.

The second-highest increase, 35 percent, was proposed by Indianapolis-based MDwise Inc. The company did not disclose the range of rate changes it expects. And MDwise CEO Charlotte MacBeth said even the 35 percent figure is certain to change.

That’s because just last week, the Obama administration’s Centers for Medicare & Medicaid Services issued final rules on how it will attempt to offset losses incurred by insurers during 2014.

Also, if Gov. Mike Pence’s proposal to expand the Healthy Indiana Plan is approved by the Obama administration, it will significantly alter the pool of Hoosiers that buy coverage via the exchanges.

“Without knowing how the new CMS rules and circumstances change, it’s hard to say where any of the rates will land,” MacBeth wrote in an email.

She declined to say, however, if she thought MDwise could remain competitive after a 35-percent increase.

It’s possible that even large premium hikes would be absorbed by corresponding increases in taxpayer-funded subsidies.

That’s because the size of the taxpayer subsidies is set so that buyers must pay only a certain percentage of their income to purchase the second-lowest cost plan in Obamacare’s silver category.

That means, so long as no insurer prices a silver plan lower than the lowest-cost plans in 2014, subsidies will rise to absorb premiums increases. But lower-priced policies would reduce the size of the tax subsidies, making any premium increases show through.

Among the more than 132,000 Hoosiers that selected health plans on the exchange for 2014, 89 percent qualified for subsidies.

There will be new entrants into the Obamacare marketplace in 2015, including Indiana University Health Plans, SIHO Insurance Services and CareSource.

And Coordinated Care, a unit of St. Louis-based Centene Corp., filed premium changes that range from a decrease of 15.5 percent to an increase of 53 percent. Its average change is projected to be a decline of 8.8 percent.

The Indiana Department of Insurance must approve any rate increases before they go into effect.

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  • Single Payer
    Concern about insurance companies taking 15% for profits and administration seem totally misplaced to me. Do you really think the poor fraud detection and government bureacracy of a single payer plan will not eat up more than 15% of medical costs? If so, I have a Postal Service I'd like to sell you, not to mention Amtrack, or the entire defense procurement system.
  • Rates
    One of the big problems, is the insurance industry does not have enough claims data to accurate project loss ratios. These are all guesses. What is not in this article is the PCIP plan being dropped and those 6,000+ High claims people being added to the ranks of the federal exchange. Trust me, carriers are worried about this influx of claims. MD Wise with the largest rate increase could be due to them having a smaller base of members. They choose not to embrace the agent distribution model, and now they have high utilization block that could already be in a death spiral. Hoosiers that qualified for tax credits and choose the Silver plans (88K people) will not be impacted by the rate increases. There has to be enrollment by the young people or we end up with 2 carriers for Indiana on the exchange. I am surprised about the comments about a 1 payer system. The gov. messed ACA beyond belief, you would actually trust them with providing you only one option?
  • RE: Exactly
    I am 47 years old, take care of myself and in great shape. I don't smoke and am not over weight. But like anything else, that takes work. I don't want to be in a single risk pool with the smoker's, obese and other high risk individuals. You failed to mention that a single payer system and single risk pool simply forces the healthy to subsidize the unhealthy. That is not fair to me. My complaint isn't against anyone that has serious medical issues that were no fault of there own, but with those that choose to eat junk food, smoke or entertain another other unhealthy habit, and create their own health problems.
  • Exactly...
    All single payer means is one risk pool, i.e. all Americans paying into one pot of money instead of having hundreds of thousands of risk pools. It is the most cost effective and efficient way to manager costs. I see no benefit in having insurance companies add 15% to cost of healthcare by adding their profit mark-up to collect premiums and pay claims when a government agency could do it at cost. You can have a single payer while at the same time allowing healthcare providers to compete for business.
    • There is a Difference
      Keep in mind that single-payer health insurance is not the same as government-provided health insurance. There is a distinction between who pays for health insurance and who delivers health care. The government can do the former (single-payer) and let the hospitals remain private. Think of it as expanding Medicare to all ages instead of restricting it to just the elderly.
    • More competition
      The higher priced plans will get skipped, and people will choose lower priced plans. Isn't this a prime example of price competition, something that has been lacking for decades in the insurance industry?
    • Obama loyalists
      Amusing to see Obama loyalists blame Republicans for Obamacare. Single payer government health care is not the answer. Ask veterans how that has turned out for them.
      • Not Surprised
        Should be of no surprise that younger healthier individuals did not participate in the ACA. Moving to a single payer would be a disaster, I have seen how "great" the Gov't runs large complex organizations and how many taxes $ are wasted, thanks, but no thanks. I am sure though the obese monster that is Gov't wont be able to help itself with obtaining more power and the sheep of the US who think more Gov't is good will end up winning in the end.
      • Keep in mind...
        These are proposed increases and the state DOI will get final approval. We shoould not surprised be as Indiana has a rather low participation rate relative to neighboring states and the majority of the people that did sign up were older and sicker (i.e. they needed the coverage). Going forward as participation increases and the wave of people with chronic medical issues gets treated, premium growth rates will stabilize. That being said, a single payer system (in which everyone pays into) would be more economical in both the long and short run.
        • Indiana
          Other states work with the Insurance providers for lower rates(negotiate) in Indiana it hands off in for pure political posturing for Pence.
        • Anthem at it again
          My old plan under Anthem had premiums of $225/month. My new ACA plan under Anthem (which has a higher deductible and next to no additional benefits) has a premium of $437 and they want to increase it again? Outrageous. Anthem appears to be taking advantage of reduced competition in Indiana to gouge those still under its plans.

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