Breaking down proposed insurance premium changes in Del. next year

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    (Photo via ShutterStock)

    The application deadline has passed for insurance companies wishing to offer health coverage through the federally run Affordable Care Act marketplaces in Delaware, New Jersey and Pennsylvania next year. Officials still have to act on the companies’ proposed rate increases, but at least in Delaware, it appears premiums may not increase as much as some had expected.

    Two companies, Aetna and Highmark Blue Cross Blue Shield of Delaware, want to offer plans in Delaware’s marketplace next year. Most enrollees went with Highmark for this year. The company is now proposing an average 5 percent premium increase based on factors like projected overall health care utilization of enrollees, their health status and age.

    “Delaware has always had a rate change, but 5 percent is certainly on the low end of what we’ve seen in the prior years,” said Linda Nemes, assistant director of market regulation for Delaware’s insurance department.

    Aetna, in its proposal, stated its premiums would go down by about 2.5 percent. The state is taking public comment through Monday.

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    Delaware’s rates appears to be in the middle of the pack and “about on par with what we think we’re seeing nationwide,” according to Mark Pauly, a health economist at the Leonard Davis Institute at the University of Pennsylvania.

    Pauly and colleagues have found that insurance premiums during this first year of the ACA marketplaces were higher compared to past premiums, but not as high as many had expected.

    Federal officials tout new provisions of the ACA as playing a role in this. Companies can only spend a limited percentage of money on administrative costs, for example, or they must issue rebates to consumers. That has led to thousands in Delaware and elsewhere getting money back this year.

    But Pauly has some other theories on why rates haven’t gone up as much as expected.

    “More important things are, there has actually been a slowdown in the rate of introduction of expensive new products, and more people have been moving to high-deductible health plans which slows down the growth of spending for everybody, at least we think,” said Pauly.

    Pauly says the ACA has created more uncertainty, and with that, more cautious spending among hospitals and providers. He says it’s unclear whether that will change.

    Federal officials will have final say on the proposed rate increases in Delaware, Pennsylvania and New Jersey in the fall.

    Pennsylvania’s insurance department would not disclose how many companies have applied to participate in its marketplace next year or the details of those proposals. A spokesperson said the state will only do that for companies requesting a rate increase of 10 percent or more.

    Overall, Delaware premiums are higher than the national average, before factoring in federal assistance. Regardless of any average premium cost or rate hike, Pauly cautions that it doesn’t tell the whole story. He says individuals will want to pay attention to the actual plan details and what exactly is covered for the price they’re paying when making a selection next year.

    “The alternative of saying I just want to pick a company and stick with it and not bother it, well that’s probably a recipe for peace of mind but probably not a recipe for getting the lowest price for your health insurance.”

    According to Nemes, with Delaware’s insurance department, Highmark is proposing 28 plan options for the individual insurance market while Aetna is proposing 20.

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