2017 Rate Changes

As I noted this morning, while I've managed to track down the requested rate hikes for 31 states & DC so far, the remaining 19 states could take awhile. Michigan won't be posting theirs for another week or so, other states could be longer...and then there's Alabama:

Health insurance companies that want to raise rates more than 10 percent next year will get an extra dose of scrutiny from Alabama regulators this year – for the first time since the marketplace launched in 2013.

Under Obamacare, states were supposed to implement systems for reviewing, and in some cases rejecting, rate increases that exceed 10 percent. Alabama was one of six states that didn't create an effective rate review program, despite receiving a $1 million grant to bolster oversight at the Department of Insurance, according to the Centers for Medicare & Medicaid Services.

After crunching the numbers for the requested rate changes (OK, rate hikes) across 31 states & DC, it looks like it's gonna be awhile longer for the remaining 19 states to post their rate filings publicly. For instance, while Michigan's SERFF database has had a whole mess of rate filing stuff posted for weeks now, none of them appear to include the two pieces of crucial data that I need for this project: The actual requested average percentage rate changes and the actual number of current lives covered by those policies...and likely won't for at least another week:

2017 Rate Filings - Individual Products - ALERT

The 2017 Individual Product filings are not yet complete. Partial filing information was submitted by issuers on May 9, 2016.

By my count, Tennessee has a total of 6 companies offering individual policies this year (Aetna, TRH, BCBS of TN, Cigna, "Freedom Life" (hah!) and Humana. UnitedHealthcare is dropping out next year, leaving at least 37,000 people to switch to a different policy (this is based on this article in the Tennessean, which claims that United currently has 15.76% of the On-exchange individual market in Tennessee). TN had 269,000 people select exchange-based QHPs during the 2016 open enrollment period. Assuming around 13% net attrition since then, that leaves around 234,000 current enrollees on the exchange. If United holds 15.76% of those, that's around 37,000 poeple.

There are only 2 things I'm certain of when it comes to the requested rate hike filings in Arizona's individual market:

  1. It's a confusing mess.
  2. Regardless of #1, Arizona's requested rate hikes are jaw-dropping even when weighted by carrier.

The data below is drawn from two sources: The RateReview.HealthCare.Gov database and Arizona's Health Filing Access Interface (HFAI) SERFF database.

As you can see, there's some confusing and contradictory numbers, but I'll try to muddle through each:

So just last Friday I posted the weighted average requested rate hikes for the Arkansas individual market; it came in at 14.9% overall, which is actually one of the lower statewide averages this year. As a reminder, here's what how the breakout looks:

OK, so 3 major carriers asking to jack up rates 15-24%, plus one at 8.5% and two others with just 7 enrollees between them (one of which is, once again, Freedom Life Insurance). So what?

As regular readers know, I'm currently in the thick of my state-by-state analysis of the requested, weighted average rate changes for 2017 by insurance carriers for the entire ACA-compliant individual market. As of this writing, the overall average looks like it's just a hair over 20% across 28 states + DC.

Does the first sentence above include a lot of clarifiers? Yes, yes it does...and with good reason. I try to be very specific when I discuss this stuff, because it's very easy to get confused about what a given number is actually referring to.

For instance, a few days ago, Avalere Health released their own analysis which concludes that the average requested/proposed premium rates are around 12%. If I left it at that, you might think that either my average is 8 percentage points too high...or that Avalere's is 8 points too low.

Thanks to commenter "Junaed S" who directed me towards this simple, cut 'n dry PDF from the Connecticut Dept. of Insurance detailing the requested rate hikes for the CT individual and small group markets for 2017:

Over 150,000 Colorado residents selected QHPs via Connect for Health Colorado during open enrollment this year, and the total CO individual market was well over 270,000 in 2014; as of today, it's supposedly up to a whopping 450,000 people, which sounds awfully high to me (nationally the indy market has grown by around 25% over the past 2 years, so 66% is an outlier):

In addition, Anthem has decided not to offer its PPO (Preferred Provider Organization) individual plans in 2017. In all, the Colorado Division of Insurance said Monday around 92,000 people with individual plans from Anthem, UnitedHealth, Humana, and Rocky Mountain Health Plans will have to find other coverage during open enrollment in the fall.

Can I first say that I absolutely love the way Nevada's rate filing database is set up, especially their (apparently proprietary and mandatory) filing format system?

Unlike the standard SERFF database, which is comprehensive but also can be confusing as hell, Nevada's system is simple, clean, easy to navigate and, most of all, every single carrier filing listed displays the number of current enrollees clearly. This is a huge pet peeve of mine, which is understandable given what I'm trying to do here!

OK, that said, here's what things look like in the Silver State:

Delaware is a small state, and only has a total of 4 carriers offering individual polcies (2 on exchange, 2 off). One of those, however, is once again "Freedom Life" which, once again, is asking for precisely a 17.37% rate hike on their almost-certain-to-be-nonexistent enrollees. So...never mind them. That leaves Aetna (split into HMOs and PPOs) and Highmark BCBS offering policies on the exchange, and Golden Rule off the exchange.

Unfortunately, I can't find Golden Rule's actual current enrollment number, but as you can see below, it really doesn't matter:

As you can see, no matter how many enrollees Golden Rule has, their 30.3% average hike request is very close to the 30.6% average of the other carriers. The very most it could do is nudge the weighted average down by a tenth of a point or two, so let's call it 30.5%. 

The good news about Kansas is that 5 of the 6 carriers which have submitted 2017 individual market rate filings included their current enrollment totals in a clear, easy to see format...and the 6th one is (once again) "Freedom Life" which, judging by the dozen other states they've popped up in, almost certainly has only 1 or 2 enrollees (or none at all) anyway.

The bad news is...well, the requested rate hikes are pretty ugly: About 35.3% on weighted average.

Also, is it really necessary for Blue Cross Blue Shield to operate under three nearly-identical names? Really?

Arkansas was a little weird...while the rate filings for 5 carriers are listed over at RateReview.HealthCare.Gov, the carrier with the largest individual market share in the state, BCBS (aka "USAble Mutual") is nowhere to be seen (there's a sm. group listing for them, but not individual). However, when I went directly to the AR SERFF database, there they were--and it's listed specifically as "2017 Individual QHP Rates", so there's no question here about whether they plan on offering ACA-compliant policies in 2017.

Anyway, between the HC.gov site and the SERFF site I was able to cobble together pretty much all of Arkansas' indy market. The numbers seem about right; AR's indy market was around 303K in 2014; while it's likely up to 375K or so today, the "missing" 70K can easily be attributed to UnitedHealthcare dropping out and/or grandfathered/transitional enrollees.

At 14.9% on average, this is actually good news for 2017, relatively speaking.

Oklahoma's entire individual market (including grandfathered/transitional plans) was around 172,000 people in 2014. Assuming it's grown roughly 25% (in line with the national increase), it should be up to perhaps 215,000 people by today, of which perhaps 195K are ACA-compliant.

This is significant because there appear to be only 3 carriers offering individual policies in Oklahoma next year...one of which is the infamous "Freedom Life Insurance Co." which I wrote about last night. Since Freedom Life has (as usual) only a single enrollee in the state, it's really a nonfactor for calculating the weighted rate hike average.

That leaves Blue Cross Blue Shield of Oklahoma, which has a whopping 170,000 enrollees...and CommunityCare (which is in turn broken into HMO and PPO divisions)...unfortunately, their rate filing doesn't include their enrollment number; all it says is that it's "too small to be credible" to be used as the basis of their rate hike request. In addition, UnitedHealthcare is dropping out of the OK indy market; I don't know how many enrollees they actually have.

Throughout the summers of 2015 and 2016, the news media was chock-full of apocalyptic headlines screaming about MASSIVE DOUBLE DIGIT OBAMACARE RATE HIKES!!!, suggesting that rate hikes of 20%, 30% even 50% would be not just widespread but the norm nationally.

The reality, as I repeatedly tried to get through people's heads, is that while some carriers in some states were trying to push through massive hikes on some plans, the overall picture was far less dramatic. Many were seeking increases of under 10%, while some (not many, I admit) were even reducing rates. When you averaged out the rate changes by state and then weighted them by the number of people actually enrolled in those policies, it came in at around 7-8% in 2015 and around 12-13% in 2016.

Do me a favor: Take a look through all 20 or so of the 2017 Rate Request entries I've put together. Notice anything? Here, I'll make it easier:

  • Wyoming: "Freedom Life Insurance" asking for a 17.37% rate hike...on 0 enrollees.
  • Virginia: "Freedom Life Insurance" asking for a 9.98% rate hike...on 0 enrollees.
  • Maryland: "Freedom Life Insurance" asking for a 34.0% rate hike...on 0 enrollees.
  • Missouri: "Freedom Life Insurance" asking for a 17.37% rate hike...on 0 enrollees.
  • Pennsylvania: "Freedom Life Insurance" (aka "National Foundation Life Insurance Co.") asking for a 9.95% rate hike...on 0 enrollees.
  • Texas: "Freedom Life Insurance" asking for a 17.37% rate hike...on 8 enrollees.
  • Nebraska: "Freedom Life Insurance" aka "Enterprise Life Insurance" asking for a 17.37% rate hike...on 0 enrollees.
  • North Carolina: "National Foundation Life Insurance Co." asking for a 17.37% rate hike...on 0 enrollees.