(07-11-2015 09:14 PM)RobertN Wrote:  

(07-11-2015 08:15 PM)dawgitall Wrote:  

(07-11-2015 07:44 AM)QuestionSocratic Wrote:  From WSJ editorial:

Quote:President Obama dropped by Nashville last week to claim Tennessee as a state where “the law has worked better than we expected” and “actually ended up costing less than people expected,” so let’s test the reality of those claims. As a baseline, in 2015 premium increases for Tennessee plans ranged from 7.5% to 19.1%.

For 2016 BlueCross BlueShield of Tennessee—one of the state’s two major insurers—is requesting a 36.3% increase. One product line from Community Health Alliance Mutual is rising 32.8%, while another from Time Insurance Co. hits 46.9%. Offerings from Cigna, Humana and UnitedHealthcare range from 11% to 18%. If this means ObamaCare is working better than the President expected, then what, exactly, was he expecting?

Increases need to be weighted in order to get much of an idea of how much it is actually going up. A 46.9% increase sounds awful but if Time Insurance makes up a single digit percentage of the market it is a lot less significant than if they make up say 45%. That 36.3% from BCBS given that it is a major player in the market is much more concerning.

Another thing to note is that in some cases insurance companies attempted to build their brand with lower rates and then went up on them the next year. With about 70% of the people in 2015 simply renewing without shopping around that isn't the worse strategy. Other times the actuaries, working with limited data just plain got the numbers wrong and they ended up taking a significant lose. Then there is the fact that there was a lot of pent up care that was addressed in 2014 and 15 with the most medically needy being the ones that signed up. In 2016 new enrolls will tend to have less medical issues and those earlier signups will hopefully be more stable in their medical needs as they will have had better care over the last 1-2 years. Also a lot of the "grandmothered" policies will expire and those often healthier people will be included in pool for the first time. With several years of data to work with, an expanded pool, and healthier new enrollees rates should be more stable going forward.

Here is an example of how a huge increase like some that are mentioned can sometimes be deceiving. If plan A was around $200 a month in 2015 but plans B, C, and D were around $300, and in 2016 plan A goes up to $300 that is a 50% increase. But it is in line with the the other plans.

Haven't followed how increases are figured except that I believe there is a governing body that analyzes the rates.Is this like negotiations where you always start high knowing that the increase will be somewhere in the middle of what they will eventually get at the end of the negotiations?

Each state has their own system. Sometimes there is a commission that looks at the rates, sometimes the elected State Insurance commissioner has the final word. In some states rates have to be approved by one or the other and in other states they don't have the authority to actually reject or approve rates as long as they rate requests adhere to the guidelines. Rates have to be high enough so that the companies have enough revenue to pay providers throughout the year so in some cases insurance commissions will require them to go up on their rates. The companies are competing against each other for buyers so they actually have to hit that sweet spot between a rate high enough to make a good profit and low enough to be attractive to buyers.

Rhode Island health insurance exchange / marketplace
Proposed weighted average 2016 rate increase under 8% for individual plans in HealthSource RI

http://www.healthinsurance.org/rhode_isl...-exchange/

Maine premium rate increase request is a weighted average of +0.7%
California premium rate increase approved at weighted average of 4%