NCPA - National Center for Policy Analysis

Health Insurers Plan Hikes

September 8, 2010

Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, says the Wall Street Journal.

  • Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1 percent and 9 percent to pay for extra benefits required under the law, according to filings with state regulators.
  • The rate increases largely apply to policies for individuals and small businesses and don't include people covered by a big employer or Medicare.
  • About 9 percent of Americans buy coverage through the individual market, according to the Census Bureau, and roughly one-fifth of people who get coverage through their employer work at companies with 50 or fewer employees, according to the Kaiser Family Foundation.

Many carriers also are seeking additional rate increases that they say they need to cover rising medical costs.  As a result, some consumers could face total premium increases of more than 20 percent.  While the increases apply mostly to the new policies insurers write after Oct. 1, consumers could be subject to the higher rates if they modify their existing plans and cause them to lose grandfathered status, says the Journal.

  • Aetna, one of the nation's largest health insurers, said the extra benefits forced it to seek rate increases for new individual plans of 5.4 percent to 7.4 percent in California and 5.5 percent to 6.8 percent in Nevada after Sept. 23.
  • Regence BlueCross BlueShield of Oregon said the cost of providing additional benefits under the health law will account on average for 3.4 percentage points of a 17.1 percent premium rise for a small-employer health plan.
  • In Wisconsin and North Carolina, Celtic Insurance Co. says half of the 18 percent increase it is seeking comes from complying with health law mandates.

Previously the administration had calculated that the batch of changes taking effect this fall would raise premiums no more than 1 percent to 2 percent, on average.

Source:  Janet Adamy, "Health Insurers Plan Hikes," Wall Street Journal, September 8, 2010.

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