With the 2014 open enrollment period for the health insurance exchanges complete for the most part, health insurance companies are working on setting their rates for next year.
Depending on the risk pool for the Patient Protection and Affordable Care Act exchanges, analysts have predicted insurers could raise premiums and seek additional reimbursement discounts from hospitals. Dave Axene and Elaine Corrough, fellows of the Society of Actuaries, have offered the following three insights on health insurance pricing for 2015, based on their work with insurers.
1. Health insurers will increase rates by 6 percent to 8.5 percent on average. Although rates will vary widely across the country, Ms. Corrough and Mr. Axene predict medium-sized single-digit rate increases, based on medical inflation and the exchange enrollee population.
2. Insurance companies are still working with limited claims data. Insurance companies are still working with premature data concerning policies sold through the health insurance exchanges. In most cases, they currently only have data from January and February to use as a reference for setting rates, according to the SOA fellows.
3. It's crucial to look ahead to 2017. Mr. Axene and Ms. Corrough emphasize it's important for health insurers to look forward to 2017, when two of the PPACA's insurance market stabilizing provisions, reinsurance and risk corridors, will expire. That means insurers should prepare now for the loss of these safeguards for insurance companies with low profitability on the exchanges.
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