Harrisburg, PA - Insurance Commissioner Teresa Miller today announced 2016 rates for individual and small group health insurance plans offered in Pennsylvania under the Affordable Care Act. Open enrollment for these plans begins November 1.
“With the announcement of these rates, Commissioner Miller is continuing my administration’s push for consumer protection across the commonwealth,” said Governor Tom Wolf. “We are working to guarantee that Pennsylvanians can continue to shop for their best coverage options in a competitive insurance marketplace, while still paying reasonable prices.”
Commissioner Miller said the approved rates will save Pennsylvania consumers nearly $81 million compared to the rates proposed by insurers in June.
“We consider many factors when making final decisions on health insurance rates, but the impact on Pennsylvania consumers is always our top priority,” Commissioner Miller said. “Six insurers in the individual market proposed rate hikes of more than 25 percent, but we were concerned about how these increases would affect consumers. The Insurance Department ultimately approved final rates that are significantly lower than were originally proposed.”
Other factors considered by the Insurance Department when determining final rates include claims paid over the past year, as well as estimates of future costs, such as medical and prescription drug costs and administrative expenses and the insurers’ current surplus. For all six companies that proposed rate hikes above 25 percent, the commissioner requested the companies phase in increases over additional years if necessary. The commissioner noted these companies are sufficiently strong financially to accommodate this request.
Commissioner Miller noted there are 19 companies offering individual health insurance plans under the Affordable Care Act in Pennsylvania, and 23 companies offering plans for small groups, which are businesses with 50 or fewer employees. Of the 19 companies offering individual health plans, 12 have increases under ten percent. All 23 companies offering small group health plans will have increases under ten percent.
“I encourage all consumers to take advantage of Pennsylvania’s competitive market and shop around to see if there is a better plan which offers benefits better suited to their needs,” Commissioner Miller said. “All Pennsylvanians have the choice of at least four individual plans in their area, and most have multiple plans from which to choose.”
When looking at the percentage increase for a given health plan’s rate, it is important to understand what the current rates are for that plan, and whether the rates actually cover the insurer’s costs. When the Affordable Care Act took effect in 2014, insurance companies had no claims history with which to estimate how many claims the newly insured population would file, or how much those claims would cost insurers. In many cases, insurers underestimated the cost of the claims individuals newly insured would file, and the premiums charged to cover these costs are now being set at a level to more accurately reflect insurers’ anticipated costs.
“Pennsylvania consumers overall enjoy lower rates than consumers in nearby states and the nation as a whole,” said Commissioner Miller. “For example, when comparing the lowest cost silver plans in each state for 2015, Pennsylvania’s average monthly premium of $222 is $66 below the average for states in the northeast region, and $42 below the national average.”
In addition, more than 80 percent of Pennsylvanians buying individual health insurance through plans offered on the federal government’s Marketplace, www.healthcare.gov, receive subsidies to help pay their premiums. Individual health plans are offered both through this federal Marketplace and directly from private insurers, but consumers are eligible for subsidies only for plans bought through the federal Marketplace.
Current health plans are in effect through December 31. In order to have coverage under new or continuing plans begin January 1 and avoid any lapse in coverage, consumers must enroll for 2016 by December 15.
To help consumers find their best plan, the Insurance Department has provided information on rates by area of the state, an explanation of the process for approving rates, and a shoppers’ guide to help individuals navigate the process of buying insurance on their website, www.insurance.pa.gov. On the main page, click on “2016 Affordable Care Act Rates by Rating Area” to see examples of rates in specific regions, and under the Consumers tab, click on “Health” to find the shoppers’ guide. When open enrollment begins on November 1, a list of all plans available on the federal Marketplace in Pennsylvania and the cost of each will be available on www.healthcare.gov.
MEDIA CONTACT: Ron Ruman - 717-787-3289
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