Noise is good

Welcome to the convergence zone. Rates are still being formulated for the 2015 open enrollment/new product period, but initial estimates are being released by state regulators. There are two things to note. The first is that companies seem to be operating reasonably independently in their 2014 rate estimates so the 2015 corrections are all over the place. Some companies were too optimistic in 2014 so they are raising rates to cover costs; other companies were too pessimistic so they are cutting rates to attract membership. Reasonably random error and noise is a good thing, esepcially if we assume that 2014 really could be treated as the Exchange beta testing year.

The second thing of interest is rates will start converging. Companies are operating off of less incomplete information than they did in 2014, so assumptions are being validated or replaced by actual data. Insurance companies are in the business of massive data mining and projection, so more data is usually better. Similar products with similar networks will be priced reasonably close to each other. Information and search costs for individuals should decrease significantly as the products are operating under less adverse information biases.

Charles Gaba:

District of Columbia: 3 of 4 insurance companies either lower rates or keep them stable for 2015

Washington State:

LifeWise has proposed an 8.9 percent rate increase.

Other insurance companies with large chunks of the individual market — Coordinated Care Corp. and Group Health Cooperative — are both proposing rate increases of just over 11 percent.

All four companies had similar monthly rates in 2014 and would likely come even closer together in 2015 if their proposals were approved by the state:

■   Group Health’s average silver plan for 2014 was $280.47 and would be $312.50 in 2015 if its price increase is approved.

■   Premera would go from $300.94 to $328.03 for a similar plan.

■   LifeWise would go from $301.07 to $329.36.






19 replies
  1. 1
    Morzer says:

    http://thehill.com/policy/heal.....in-florida

    Not a single health insurance company on Florida’s ObamaCare exchange has asked to increase its rates for next year, according to a report.

    Of the nine companies that have filed their proposals so far, seven are reportedly asking for zero increase in price and two are asking to lower their premiums by 7.9 and 11.16 percent on average.

    If accurate, the rates deal a blow to ObamaCare critics who predicted insurers would have to hike premiums substantially in states like Florida, where older, sicker patients were expected to outnumber younger, healthier ones.

    “The fact is, an overall pattern of insurers not seeking rate increases — and even seeking rate decreases — is unheard of,” Greg Mellowe, policy director for the consumer advocacy group Florida CHAIN, told Health News Florida, which broke the story Tuesday.

    The nine companies that have filed rates so far include five health maintenance organizations, or HMOs, and four other insurers.

  2. 2
    Derelict says:

    Here in Vermont, things are not working out so well. When I had to sign up for insurance through the state-mandated exchange, I had to drop my old policy that had a $505/month premium and a $500 deductible. The new plan I signed up for (the top-tier “platinum” coverage) has a $1,500 deductible and a $497/month premium.

    I just got a notice that my premium is going up to $505/month. So, in the end, I’m paying what I used to pay, but have had my deductible tripled and have fewer services covered.

    I am NOT a happy camper.

  3. 3
    Xantar says:

    Add Maryland to the good news. Blue Cross asked for a big premium increase (subject to approval by the Insurance Commissioner), but Kaiser Permanente and our health co-op both asked for decreases. And two new insurance companies are asking to join in.

  4. 4
    Richard Mayhew says:

    @Morzer: There is some dispute on the Florida numbers — that was in my draft (via Booman) but the state regulators are stating that the numbers are not accurate, so I pulled it.

  5. 5
    Morzer says:

    @Richard Mayhew:

    I am sorry, Richard, I didn’t know that those figures were McArdled.

  6. 6
    MomSense says:

    @Derelict:

    Can you provide some information about coverage? How comprehensive was your old plan as compared with the new plan?

  7. 7
    Derelict says:

    @MomSense:
    Old plan covered just about everything. I just had to meet the deductible. The new plan is also reasonably good on coverage, though now I have a raft of co-pays for everything. And triple the deductible. In 30 days, I’ll have a much better idea of how good the new coverage is when I go in for a colonoscopy. Not sure if that will fall under “preventive care” and thus be completely covered.

  8. 8
    pseudonymous in nc says:

    Richard: any sense yet of the prevailing assumptions about churn, and particularly churn within Exchange plans? Or is that going to be the big thing for 2015, based on what people actually do?

    Are Exchange plan providers likely to make suggestions to their customers about “upgrades” during the renewal period, or will the aim be to retain them on whatever plan they signed up for?

  9. 9
    aimai says:

    @Derelict: I’m sorry that this situation isn’t good, Derelict. I’d love to hear what Richard has to say about it. We have employer sponsored healthcare, a 6000 dollar deductible, and co-pays for almost everything except things that the ACA has specifically mandated come without a co-pay. I get that this seems like a blow to you compared to your previous health insurance but I can assure you that from the point of view of the group market its a very good deal.

  10. 10
    SuperHrefna says:

    I just had a letter from my plan this week, saying they want to raise the premium $85 dollars per month, and one of their justifications for this is “in 2014 other health plans in your area were on average 24% higher than Health Republic” they also cited “increasing medical costs, declining federal support, and to ensure our organization achieves long term sustainability as New York’s only not for profit co-op” I’m not hugely thrilled but I’ll stay with them because they cover the hospital network that I live closest to, and prefer to use.

    I live within five miles of two different hospital networks, but my first choice for Obamacare, Emblem, wouldn’t cover any hospital network within twenty miles of me. That plan looked way better on paper than the Health Republic one but their network was grossly inadequate and luckily I figured out what was going on before the deadline to switch plans. I don’t mind a narrow network but I do mind being shut out of ALL the doctors and hospitals in my immediate area. So yeah, I’ll stick with my new plan increase and all, but I do reserve the right to grumble a bit about it :-)

  11. 11
    MomSense says:

    @Derelict:

    Huh, I’m sorry this happened to you. It’s so different from my experience going from insured on the individual market where I paid $1,600 a month for crappy coverage to now paying $440 a month for much better coverage with a lower deductible and lower out of pocket, etc.

  12. 12
    SuperHrefna says:

    Before Obamacare I was paying $1,000 more per month for my insurance. After the new increase comes through I’ll still be saving $900 per month over the old pre- Obamacare plan.

    But yeah, I’m still feeling grumpy about that $85. And I’d be way more impressed by Health Republic’s adorable non profit scrappiness if I didn’t know that they are owned by Magnacare.

  13. 13
    Richard Mayhew says:

    @Derelict: If this is a screening colonoscopy, it should be 100% covered (although you might get hit with a facility fee — ask about that) If this is a second colonoscopy as a follow-up/diagnostic, it will be deductible eligible first.

  14. 14
    Aaron says:

    In NYC I have MetroPlus Platinum for 462$/mo including dental and optical. Just got a letter that next year the plan will be 592$/mo for a 28% increase. All without subsidies.
    :(
    I am going to check my alternatives on the NY Exchange when its time later this year.

  15. 15
    SuperHrefna says:

    @Aaron: you got dental? Out here in my patch of Lawn Guyland none of the plans include dental for adults.

    I would totally shop around too, except that my hospital of choice only accepts one Obamacare plan. So any shopping I do will be limited to calling their billing department and seeing if that has changed.

  16. 16
    Mnemosyne says:

    @Derelict:

    So far, it does seem that people in smaller-population states are getting a little screwed because their market is so much smaller, so the insurers can justify charging more. I’ve been advising people to complain to their state regulators (and probably your state representatives as well) about price increases and other shenanigans so the regulators know where to put some pressure on the insurers.

    I heard that you guys were supposed to be moving towards a single-payer system, but it sounds like it’s not quite functional yet?

  17. 17
    lurking begonias says:

    @Richard Mayhew:

    What about a screening ‘scope performed earlier than typical due to family history? Of the insurance policy wonks I’ve asked, one said completely covered and the other one said deductible eligible. Care to be the tie-breaker?

  18. 18
    Derelict says:

    @Mnemosyne:
    Governor Shumlin is still touting the upcoming single-payer system for Vermont. However, I think he figured out two years ago that it’s economically impossible to pull off. That’s why he’s refused to divulge anything about it–including (and especially) cost projections that he promised to deliver to the legislature three years ago.
    I think Vermont’s tiny population, coupled with the fact that about 40% of that population is on state or federal aid of some sort (that’s everything from AFDC to retirees on Social Security) and our ever-shrinking employment base mean there’s just not enough money in the state to support single-payer.

  19. 19
    Mnemosyne says:

    @Derelict:

    I’m pretty sure that the first single-payer state is going to need to be a high population state like California or New York — otherwise, there just isn’t the tax/income base to support it. I’m opposed to allowing insurers to sell across state lines, but it might be an interesting experiment to allow some of the smaller population states that share a border to essentially declare themselves a single market for insurance purposes and see if that can bring some of the costs down since there would be a better economy of scale for the insurance companies. You’d have to pick your neighbor carefully, though. :-)

Comments are closed.