HHS urging states to negotiate lower marketplace rates

The Obama administration this week asked state insurance regulators to take a closer look at marketplace rate requests before granting them (Source: “HHS Pushes States To Negotiate Lower Obamacare Rates,” Kaiser Health News, July 22, 2015).

Under the ACA, state agencies largely retain the right to regulate premiums in their states. So far only a handful have finalized premiums for the coming year, for which enrollment begins in November.

In a letter sent separately this week to insurance commissioners in every state and Washington D.C., Kevin Counihan, the CEO of the federal health exchange, healthcare.gov, said recent data suggest that rates should not go up as much as some insurers are proposing for plans sold to individuals on the health exchanges.

An analysis of proposed rates by the consulting firm Avalere Health found that for a 50-year old non-smoker, premiums for the lowest-cost silver plan will rise by an average of 4.5 percent in the eight states they studied. Average premiums for the second-lowest silver plan will rise by only 1 percent. (Most analyses of premiums look at silver-level plans because they have been by far the most popular, attracting more than two-thirds of those who have signed up using the exchanges.)

However, some plans also appear to be trying to increase premiums for 2016 to protect against losses in 2017. That’s when special programs included in the ACA to protect insurers from very high risks will expire. The Obama administration has been trying to reassure health plans that enroll unexpectedly expensive patients that not only does it have enough money to continue the programs through 2016, but that plans would get even more than they expected in some of these special payments.