People who buy health insurance on their own – either from HealthCare.gov or directly from insurance companies – could see premiums increase up to 25.4 percent next year.
The Kansas Insurance Department approved the increases Tuesday. Originally, companies had proposed rate hikes as high as 39 percent.
Fewer than 5 percent of Kansans would be affected by the approved rate increases, according to the Insurance Department.
The rate increases don’t apply to people who buy health insurance through their employers. But Craig Van Aalst, assistant director of the health and life division at the insurance department, said he doesn’t expect large group insurance rates to spike like individual rates.
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“It’s really just a different animal than individual,” he said about large group health insurance.
The rates for large group insurance plans likely won’t take shape until September or October, according to Janet Hamous at the Wichita Business Coalition on Health Care.
Rates for small businesses that lack the buying power of large employers will be posted on RateReview.HealthCare.gov in early October, according to the insurance department.
There are several reasons rates for individual insurance plans are going up faster than group plans.
One is the guaranteed coverage for individual insurance plans granted through the Affordable Care Act, Van Aalst said.
This was the first time insurance companies had a full year of experience with Affordable Care Act claims before the companies had to set rates for the following year. Many say the steep increases stem from more expensive claims than previously expected.
“The people that went to the exchange or the marketplace … they have not been to the doctor for a long time, and I think they were more sick than anyone realized, because no one had been tracking them,” said Cindy Hermes, director of public outreach for the insurance department.
Kansas has the fifth-highest risk score for individual insurance plans in the nation, according to a June report from the Department of Health and Human Services, meaning that companies consider Kansans riskier to insure.
The score is meant to reflect the average risk of people buying individual plans in each state. It’s calculated using what’s called the market risk pool in each state divided by the number of insurance plans in that state.
The insurance department would not release a list of approved rates, and HealthCare.gov had not yet listed the approved increases on its rate review website.
To view the proposed increases and the approved increases once they’re posted, visit RateReview.HealthCare.gov.
Only companies that proposed increases of 10 percent or more will be listed on the site. The approved increases are averages, so an individual could pay less or more.
That’s because people can choose from tiers of benefit choices such as bronze, silver, gold and platinum within each plan.
And under the Affordable Care Act, companies can calculate a person’s insurance premium using the person’s age, location and tobacco use. For people with family plans, the size of the family and ages of each family member also factor in.
Right now, three companies make up most of the Kansas health insurance market: BlueCross BlueShield, Aetna and Coventry Health and Life. But starting Jan. 1, Kansans also will be able to buy insurance from UnitedHealthcare.
Ken Selzer, the Kansas insurance commissioner, had said previously that more competition among companies could help with premium costs.