BY DANIEL CHANG AND NICK MADIGAN
Floridians who buy health insurance on the individual market for next year will face an average increase of 13.2 percent in their monthly premiums, according to rate proposals unveiled Monday by the state’s Office of Insurance Regulation.
The rate proposals affect all Affordable Care Act-compliant health plans on the individual market, whether they’re sold through the federally-run exchange or not. Small and large group health plans typically offered by employers were not included in the data released by the state.
Fourteen companies filed ACA-compliant plans for Florida’s 2015 individual market, including three new companies that did not participate on the federally-run exchange last year.
Of the 11 returning plans, eight filed average rate increases ranging from 11 to 23 percent, and three filed rate decreases ranging from 5 to 12 percent, the state’s insurance regulator reported.
Gov. Rick Scott, a Republican who is campaigning for reelection, seized on the report to criticize his Democratic challenger, Charlie Crist, and the ACA, commonly referred to as Obamacare.
“Obamacare is a bad law that just seems to be getting worse,’’ Scott said in a written statement. “Florida families are going to be slammed with higher costs.’’
Supporters of the health law, however, were quick to discredit the state’s methodology for calculating the impact to consumers.
Florida CHAIN, a health consumer advocacy organization, accused the state insurance regulator of engaging in “a frenzied rush to mislead’’ consumers by failing to weight averages based on who is enrolling in which plans, said Greg Mellowe, policy director.
“OIR’s method of averaging is all about skewing the data to the extreme, and their report should be disregarded,” he said.
According to the state report, the average monthly premium for a silver-level plan — the most common type of health plan selected by the nearly 1 million Floridians who bought a plan on the ACA exchange for 2014 — ranges between $938 and $1,452 for a family of four earning $51,000.
Those rates are before federal subsidies available to qualified consumers based on their household income, and which help them pay monthly premiums and out-of-pocket costs such as deductibles, copayments and coinsurance.
“Even with a federal subsidy, that could mean an out-of-pocket cost of $500 or more per month to have coverage that still requires Florida families to pay about 30 percent of expenses out-of-pocket,’’ read a statement from Florida’s insurance regulator.
But Tasha Bradley, a spokeswoman for the U.S. Department of Health and Human Services, disagreed with the state’s assessment.
Bradley said in a written statement that federal subsidies will significantly reduce premiums for qualified consumers who earn up to four times the Federal Poverty Level, which is about $46,680 for an individual or $95,400 for a family of four in 2014.
“After tax credits, the average premium cost for people in Florida this year was $50 for a silver plan, the most popular plan type,’’ Bradley said.
An HHS report released in June noted that the average reduction in premiums for Floridians who received a federal subsidy was 80 percent.
About 893,000 people or 91 percent of Floridians who bought coverage on the exchange also receive a federal subsidy to lower their share of the premium, according to federal data.
According to the state report released Monday, most insurers propose double-digit premium increases, including the state’s largest health insurer, Florida Blue, which announced last week that premiums would increase by an average of 17.6 percent for its exchange plans.
Health First Insurance, which sold 15 types of plans on the ACA exchange in 2014, proposed an average increase of 23 percent for its PPOs plans next year — the highest jump of all companies offering coverage on the individual market, according to the state.
Humana, which offers 35 plans on the ACA exchange, proposed increasing average monthly premiums for its HMO by about 14 percent.
Nancy Hanewinckel, a Humana spokeswoman, said in a written statement that the proposed increases were “primarily driven by underlying cost of services, including physician and provider fees; health care utilization; and increased prescription drug costs, particularly the fast-growing use of high-cost specialty medications, such as Sovaldi for Hepatitis C.’’
Joe Mondy, a spokesman for Cigna, said the company’s proposed 17 percent rate increase was “based on our customers’ 2014 early clinical experience and claims payments, expected medical trend, along with other factors such as the phase out of the government reinsurance program and expectations on the changing risk pool in 2015.’’
Most insurers echoed the explanations from Cigna and Humana — attributing increases to higher-than-expected health costs as a result of attracting customers who previously lacked coverage and are using more services than expected.
They also blamed regulations mandated under the health law, which forbids insurance companies from denying people with pre-existing conditions, limits the amount that they can charge their oldest members, and no longer allows them to charge more for women than men.
A dearth of young and healthy enrollees also has contributed to the increases, Florida Blue officials said last week. About 30 percent of the 984,000 Floridians who signed up for a plan on the exchange is younger than 35, according to federal data.
But at least three insurers reduced their rates for 2015 — including Aetna Health, Molina Healthcare of Florida, and Sunshine State Health Plan.
Molina sells three plans on the exchange and proposed the greatest rate drop, an average of 12 percent below 2014 rates.
Lisa Rubino, a vice president for Molina, said the company priced its Florida plans “conservatively” for 2014 but expects a healthier population and greater enrollment this year.
“We expected that the first year of the program probably sicker folks would enroll,’’ Rubino said, “so we really priced conservatively. For year two, we assumed that people are more familiar with the marketplace. We expect a healthier population. The penalties are higher this year, so people who sat on the sideline — who are probably healthy — have a reason to come in now.’’
Under the ACA, individuals who do not buy a health plan for 2015 will pay a penalty of 2 percent of annual income or $325, whichever is higher.
Insurers emphasized that rates have been going up for years, even before the ACA, but unlike year’s past there was little that Florida insurance regulators could do to help.
That’s because Florida’s Republican-dominated legislature last year stripped the insurance regulator of the power to negotiate rates with insurers for new health plans until 2016 — leaving that job to the federal government.
But while HHS will review plans, federal officials do not have authority to approve a plan based on rates.
Still, said Bradley, the HHS spokeswoman, proposed rates may change by the time open enrollment for the ACA exchanges opens on Nov. 15 and closes on Feb. 15, 2015.
“This is just the beginning of the process,’’ she said, “and as we saw last year all across the country, proposed rates were a high water mark and final rates were often lower than initially proposed.”
This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.