Insurance companies are starting to file their preliminary plans for 2015 with their state regulators. This is a long and involved multi-iteration negoatiation involving network adequacy, plan design, fee structures, geographic scope and coffee, lots of coffee. My company still has a few more weeks before our prelims need to get in, but Virginia has released their preliminary 2015 applications.
The Dow Jones newswire has some interesting tidbits:
The filings show insurers’ planned increases easily outpacing broader U.S. inflation, but shy of the much larger boosts some critics predicted.
For instance, Anthem HealthKeepers Inc., a unit of WellPoint Inc., said it intended to raise premiums by an average of 8.5%…
Virginia filings show other health plans proposing rate increases ranging from 3.3% for Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc., with around 10,000 members in the state, to 14.9% for CareFirst BlueChoice Inc., which said it had about 32,000 members. CareFirst said in its filing that it had seen the average age of its enrollees rise by several years.
This is a first pass validation at how good the respective companies’ actuaries were in their enrollment model. Kaiser seems like they nailed it, while CareFirst Blue Choice seems to have a model that was significantly optimistic in its age projection. Some of the variance may have been in the Grandmothering of policies due to “If you like, you can keep it” sideshow. This kept reasonably healthier and younger people off of some exchanges.
Overall, a market wide increase of 7% to 10% for community rated policies with unknown risk pool composition is not bad. That is no worse than most policy increases from my days as a neophyte insurance company bureaucrat. It is inline with past experiences. And given the subsidy structure, that type of increase won’t deter too many people from buying subsidized insurance next year.