Pennsylvania’s insurance regulator has rolled back the health insurance premium increases some of the state’s largest insurers had requested for plans that will be sold on its marketplace in 2016.
Geisinger Health Plan had asked for increases of up to 58%, while Highmark Inc. had requested increases of up to 36.6%. The Pennsylvania Insurance Department limited both to premium hikes of no more than 27%.
Four other companies that had asked to raise their rates by more than 25% were granted smaller increases.
Only seven of the 19 insurers that sell plans to individuals in the state marketplace had proposed increases of more than 10%.
All of the companies selling plans to businesses with fewer than 50 employees requested increases under 10%.
Highmark said its costs during the first six months of this year for claims filed by marketplace enrollees in Pennsylvania was $318 million more than it collected in premiums. Geisinger also said it paid much more for care than it received in premiums.
The firms attributed the high claims costs to unexpectedly high rates of hospitalization and to the costs of caring for cancer, heart disease, and other chronic conditions.
The companies said they will no longer offer some plans in 2016 because of the department’s ceiling on premium increases and will offer new plans with redesigned benefit options.
“The action that we need to take to keep plans financially viable is to modify the offerings,” Highmark spokesman Aaron Billger told reporter Wes Venteicher of the Pittsburgh Tribune-Review.
The head of an industry trade association told the paper that “we obviously still have ways to go in terms of keeping insurance affordable”. Samuel R. Marshall, president and CEO of the Insurance Federation of Pennsylvania, added that, “Those were thoroughly reviewed rates, and they come with some sizable increases.”
