More health insurers asking to increase rates

Two more health insurers in North Carolina are asking to increase their already-proposed rate increases.

UnitedHealthcare, which had requested an average rate increase of 12.5 percent, now is asking regulators to allow an an average increase of 20.4 percent. The range is 2.5 percent to 50.3 percent.

Humana had requested 11.3 percent and is now asking for an average of 24.9 percent.

Their requests follows one earlier this summer by Blue Cross and Blue Shield of North Carolina to seek a 34.6-percent rate hike instead of 25.7 percent. Executives with the Chapel Hill insurer said its patients covered under the Affordable Care Act were disproportionately sicker and required more expensive medical services.

The decision by UnitedHealthcare and Human to request substantially higher rates was likely caused by the same pricing trends, said Sarah Lueck, health policy analyst at the Center of Budget and Policy Priorities in Washington.

“There is this aspect of uncertainty,” Lueck said. “We all knew if would initially be difficult to know how to price these plans.”

Customers won’t know how much their rates will increase until the rates are approved and final. The N.C. Department of Insurance is reviewing the rate requests and will announce decisions next month.

The insurers submitted their revisions to the insurance department in late July. Company officials were not available for comment Monday. Humana issued a statement saying upward rate revisions are common.

“It is routine for the department and health plans to discuss and modify Marketplace rates between initial submission and their final approval,” the statement said. “The North Carolina Department of Insurance reviewed Humana’s revised rate request for 2016 that reflected new information received from the Centers for Medicare & Medicaid Services regarding risk adjustment and reinsurance payments.”

The rates affect individual health insurance policies sold on the federal health exchange under the Affordable Care Act. They do not affect health insurance obtained through employers, Medicaid or Medicare.

The open enrollment period for the ACA begins Nov. 1, and the plans go into effect Jan. 1.

For many ACA customers whose household income is between 100 percent and 400 percent of the federal poverty level, the rate increases will be offset by federal subsidies.

The ACA banned insurers from rejecting applicants with pre-existing conditions, so higher rates may be a mechanism to screen out undesirable customers, said Adam Linker, a health policy analyst at the N.C. Justice Center in Raleigh.

“All of the insurance companies are watching one another and figuring out ways to gain an advantage,” Linker said.

“None of the insurers wants to have premiums set much lower than the competition because they are afraid that they’ll get flooded with unhealthy customers.”

John Murawski: 919-829-8932, @johnmurawski