Monday, October 12, 2015

Predicting Health Insurance Rates for 2016 in Illinois

Predicting Health Insurance Rates for 2016 in Illinois

By Robert Slayton

One good thing that came out of the Affordable Care Act is that any insurance company that is going to raise premiums more than 10 percent for individual or small group medical plans is required to file with the Federal Government. This information is made public so we can review it.
Unlike other states, Illinois has no authority to prevent the increases from being implemented as requested (this isn’t necessarily a bad thing, but just the way it is in Illinois). Based upon those rate increase requests, we have a pretty good idea of who will be the competitive players in the market for 2016.

BCBS of IL has requested increases from 12.83% to 38.24% for ACA plans. As a result, BCBS of IL is eliminating the Blue PPO (large PPO network) option in 2016 for ACA plans. All members on this plan will be migrated to the smaller Blue Choice network (which has about 40% of the doctors/hospitals as the larger network). This will impact approximately 173,000 people. Also expect BCBS to eliminate other plans that have been unprofitable.

If you are on a transitional plan, (plans written after 3/23/2010 to 12/31/2014) you may see increases of over 46%.

Coventry, Humana, and Health Alliance have also requested increases. If you look at the table below, it shows, generally, which increase impacts which plan. If you are on a subsidized plan, you will not see as dramatic of an increase if your income has stayed the same. Subsidies are based upon the second lowest silver plan. The assumption is that this plan will be more expensive in 2016 therefore providing you with a bigger subsidy. For everyone else, it will be a choice of paying the increase or keeping cable.

Aetna (who owns Coventry), Land of Lincoln Health, and IlliniCare are not listed as requesting a rate increase even though I’ve heard rumblings that some have. If we go with the assumption that they will increase rates less than 10%, then these will be some of the players who will win business away from BCBS.

One unknown is Land of Lincoln Health. I’ve had conversations with a board member who says the financials look good (doesn’t mean that they made a profit as it is difficult for any start up to make a profit in the first several years). If they continue to perform as they have, I’d say they will be the company most move to.

Expect all insurance companies to modify the plans they offer. We probably won’t know what these will look like until open enrollment begins on 11/1.

Below are the rates increase requests for ACA compliant plans.

For Transitional plans, here’s the rate table.