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Health insurance firms propose to increase rates in Kansas by up to 39 percent

In total, the Kansas Insurance Department said it received 97 proposals for health insurance premiums for 2016 – 75 individual proposals and 22 small group proposals.
In total, the Kansas Insurance Department said it received 97 proposals for health insurance premiums for 2016 – 75 individual proposals and 22 small group proposals. File photo

People who pay premiums for individual health insurance policies – either directly from a company or through healthcare.gov – could pay a lot more for insurance next year.

Companies are proposing to increase rates in Kansas by up to 39 percent.

Small businesses who buy group insurance policies for their employees also are likely to see an increase.

Changes to rates on group health insurance offered through large employers won’t be released until later this year.

On Monday, the federal government posted some of the proposals for health insurance premiums for 2016 at healthcare.gov.

The Kansas Insurance Department will decide whether to accept, deny or revise the proposed premium increases in this state. Final rates will be set Aug. 25.

“We will be working to find ways to keep consumer health insurance increases as low as possible and still allow the companies to offer required quality products and service,” Ken Selzer, the Kansas Insurance Commissioner, said in an e-mailed statement.

Healthcare.gov posted only proposals for an increase of 10 percent or higher in the 37 states using healthcare.gov as their exchange.

In Kansas, 14 plans exceeded that 10 percent mark. Of those 14 plans, the heaviest increases will fall on individual plan holders with proposed premium hikes of 19.33 to 39 percent.

None of the three small-business premium increases exceeded 14 percent in Kansas. Those proposed increases ranged from 11.36 to 13.89 percent.

In total, the Kansas Insurance Department said it received 97 proposals for health insurance premiums for 2016 – 75 individual proposals and 22 small group proposals.

Bob Hanson, director of communications for the Kansas Insurance Department, said those proposals come from six different companies, up from five companies last year.

“That’s an increase in the number of options people have on the marketplace,” he said.

Not all of the insurance plans will see rate increases. The proposals ranged from a slight decrease of about 0.5 percent to an increase of 39 percent.

Mary Beth Chambers, manager of corporate communications for Blue Cross Blue Shield of Kansas, said the company underestimated costs for the past two years, which contributes to premium increases this year.

“We used our best educated guess, but it was still a guess, because we weren’t sure who was going to buy,” Chambers said.

Chambers said the people who did end up buying insurance “turned out to be higher risk.”

Under the Affordable Care Act, people with pre-existing conditions are guaranteed insurance. Before, insurance companies could choose to charge those people higher premiums or not offer them insurance at all.

Insurance companies, including Blue Cross Blue Shield of Kansas, didn’t see as many young and healthy individuals buy insurance to balance out those higher-risk members.

“In 2014, we had an underwriting loss, meaning the premiums we collected were not enough to pay for the claims our members had,” Chambers said.

She said she expects the same for 2015, which is why the company decided to increase premiums for next year.

Given that the proposed rate increases on healthcare.gov are averages, each individual under that plan could pay less or more, depending on the person.

That’s because people can choose from tiers of benefit choices like bronze, silver, gold and platinum within each plan.

Under the Affordable Care Act, also known as Obamacare, each person’s insurance premium can only be calculated by the person’s age, location and tobacco use. For people with family plans, the size of their family and ages of each family member also factor in.

Rohan Hutchings, communications director for the mid-America region of Aetna, a health insurance company that also owns Coventry Health and Life, cited CoOpportunity Health, a health insurance company that served Iowa and Nebraska, as a justification for higher premiums.

“They went bust at the end of last year,” he said. “The reason being, they priced their products so low they attracted a huge number of membership, and a lot of them were unhealthy.”

As far as premiums for group health insurance offered through large employers, Cindy Hermes, director of public outreach for the Kansas Insurance Department, said these rates don’t give much indication for what’s ahead.

Hermes said large group rates are negotiated between the company and insurer rather than through the Kansas Insurance Department.

“With a smaller company, they just don’t have that leverage,” she said.

Those rates won’t come out until late summer or fall.

Reach Gabriella Dunn at 316-268-6400 or gdunn@wichitaeagle.com. Follow her on Twitter: @gabriella_dunn.

Plans involved

Companies offering health insurance in Kansas are proposing a rate hike of 10 percent or more for the following plans:

Company name

Plan name

Requested rate increase

UnitedHealthcare Life Insurance

Co.

2015 Product – individual – 41446KS014

19.95%

Time Insurance Co.

2016 Small Group Plan – small group – 71122KS031

12.78%

Coventry Health Care of Kansas Inc.

HMO-On-Exchange – individual – 65598KS019

19.62%

Coventry Health Care of Kansas Inc.

HMO-PD – individual – 65598KS018

19.33%

Coventry Health and Life

KS PPO Individual Exchange –

individual – 61430KS010

34.71%

Coventry Health and Life

KS PPO KC Individual Exchange – individual – 61430KS011

29.72%

Coventry Health and Life

KS PPO-PD – individual – 61430KS015

35.25%

Blue Cross Blue Shield Kansas Solutions Inc.

BlueCare Solutions w/o pediatric dental – individual – 27811KS003

38.17%

Blue Cross Blue Shield Kansas Solutions Inc.

BlueCare Solutions – individual – 27811KS001

36.05%

Blue Cross and Blue Shield of Kansas Inc.

BlueCare – individual – 18558KS036

37.18%

Blue Cross and Blue Shield of Kansas Inc.

BlueCare w/o pediatric dental –

individual – 18558KS039

39%

Blue Cross and Blue Shield of Kansas Inc.

BlueCare Multi-State Plan –

individual – 18558KS038

34.76%

Blue Cross and Blue Shield of Kansas City

BlueSelect – small group – 94248KS040

11.36%

Aetna Life Insurance Co.

Aetna Fee for Service –

small group – 84600KS007

13.89%

Source: Healthcare.gov

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