Pa. insurance companies estimate rate increases while girding for ACA repeal

Amid uncertainty over whether the Affordable Care Act will be replaced, insurance companies in many states are submitting requests for high rate increases.

In Pennsylvania, the rates are rising more modestly — and the state’s insurance commissioner said the market is stabilizing.

If everything stays the same, insurance companies will request, on average, an 8.8 percent rate increase for individual plans and a 6.6 percent rise for small group plans in Pennsylvania.

“We asked the companies to let us know — if there were changes at the federal level, what that would do to rates for them,” said state Insurance Commissioner Teresa Miller.

The results? If the law mandating everyone get coverage is repealed, companies — on average — would seek to raise rates 23 percent statewide.

And if subsidies that cut out-of-pocket costs for lower income people are also repealed, Miller said, companies estimated that they would request a 36 percent rate increase.

If rates get that high, Miller predicted there could be a death spiral — or companies would simply stop participating in the exchange.

“The best-case scenario would be huge increases; the worst-case scenario would be companies just saying, ‘I don’t want to participate in this market anymore,”‘ she said.

Three-quarters of Pennsylvanians who buy insurance on the exchange qualify for subsidies, so they wouldn’t bear the full brunt of the increases, she added.

Independence Blue Cross, the only company to offer individual plans on the marketplace in the Philadelphia region, did not publicly disclose its specific request — and it can’t provide rates until the Pennsylvania Insurance Department does, according to a representative.

“Given the legislative and regulatory uncertainty around health care reform, it may be necessary to re-evaluate our proposed rates before they are finalized,” the company said in a statement that went on to express concerns around preserving cost-sharing subsidies.

Miller, who said rates will likely be finalized in August, said that anything that happens in D.C. would affect rate filings because companies will be allowed to modify their requests in response to new legislation.