Insurers in Delaware exchange seek steep rate increases

DOVER (AP) — Insurance companies participating in Delaware’s health insurance exchange under the Affordable Care Act are seeking average rate increases of about 24 percent or more for next year, state officials revealed Thursday in acknowledging the potential sticker shock for consumers.

In a rate filing with the Delaware Department of Insurance, Highmark Blue Cross Blue Shield of Delaware is asking for an average rate increase of 32.5 percent for individual plans. Rate increases would vary by plan and would range from 24.1 percent to 35.8 percent.

Highmark, which insures the vast majority of people in Delaware under the federal health care overhaul, said the overall rate increase would affect more than 11,600 members. State officials pegged the number affected at about 22,600.

Meanwhile, Aetna Health Inc. is asking regulators to approve a 25 percent average rate increase. Some 1,370 on-exchange HMO members would see rate increases ranging from 19.6 percent to 30.7 percent. Roughly 160 off-exchange members would see rate increases ranging from 19.5 percent to 30.7 percent.

“Medical costs are going up and we are changing our rates to reflect this increase,” the company said in a filing, noting that claims experience in the Delaware market has been worse than anticipated.

“Part of the rate increase is needed to ensure that we can continue to offer coverage in this market,” the company said.

Aetna Life Insurance Co. is seeking an average rate increase of 23.9 percent for individual plans. Increases would range from 18.8 percent to 28.7 percent for both on-exchange preferred provider organization plans, which currently have about 1,240 members, and off-exchange PPO plans, which have about 850 members.

State officials said that while the rate increases will affect the cost of coverage, the impact will be mitigated for the roughly 80 percent of Delawareans who were eligible for premium tax credits and purchased plans through the marketplace.

In addition to higher medical costs and claims utilization, the companies said their proposed rate increases are based in part on the expiration of a federal reinsurance program under the ACA that provided funding to insurers incurring high claims costs for enrollees. The end of the reinsurance program, which was designed to stabilize the individual market in the first years of ACA, will increase base rates by 5 percent, according to the companies’ filings.

“The loss of the temporary federal reinsurance program for 2017 is a major driver of the proposed rate change,” Highmark said.

Meanwhile, the number of qualified health plans for individuals being offered on Delaware’s health insurance marketplace is expected to drop from 29 this year to 20 next year.

The Delaware Department of Insurance will hold public information sessions on the proposed rate increases later this month and will accept written comments from the public through July 15.

“These large rate increase requests are occurring in many states across the country, and I know they will be a burden for many Delawareans,” state insurance commissioner Karen Weldin Stewart said in a prepared statement. “The proposed increases are substantial and I’m going to do my best to reduce them. As is the case with every rate request I receive, I am instructing my actuaries to aggressively examine Highmark’s and Aetna’s supporting data for their requests.”