Eight insurance companies are raising the price of health plans and three are lowering them in Florida through the Affordable Care Act exchange, state insurance officials said Monday. But whether you'll pay more or less depends on a complex formula including where you live and how companies are competing in that market.
Fourteen companies, including three new insurers, are planning to sell to Floridians through healthcare.gov in 2015. 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. Florida Blue, the largest insurer, is raising its premiums by an average of 18 percent. Humana proposed an average 14 percent increase for its HMOs, while Molina proposed a 12 percent average rate decrease, according to state officials.
Florida's increases aren't staggering as health insurance rates have risen as much as 20 or 30 percent in recent years. Critics of the health overhaul warned of huge rate increases, a signal they say shows the law isn't working.
An individual earning $27,000 a year in Miami will only see a nominal increase. For example, the average premium costs $308 a month in 2015. With a $47 subsidy, that's $261 out of pocket each month. That's only slightly more than the $245 they paid out of pocket under last year's rates, according to an analysis by state officials.
A family of four with an income of $51,000 living in Miami may also only see small increases. The average plan cost $1,072 a month, but the family only paid $559 out of pocket last year thanks to a $559 subsidy. That family might only pay $615 a month with their subsidy this year. The actual average premiums only increased by $13 in Miami for a family of four, according to the analysis.
Premiums and subsidies vary widely by factors including age, income, gender and zip code. That same family of four living in Escambia County can expect much sharper increases, where average premiums increased by roughly $150 this year. A family that received a roughly $500 subsidy each year paid $384 out-of-pocket a month last year, but may pay $532 a month this year.
Subsidies are based on the second-lowest silver plan by county, so as insurers change the price of their plan, consumers can expect to see differences in their subsidy amounts, as well.
State insurance officials are not allowed to negotiate prices with insurers for two years under a new state law. Federal health officials still have to sign off on the proposed rates.
UnitedHealth Group, the nation's largest health insurer, Health First Health Plans Inc. and Time Insurance Company will enter the Florida market for the first time through the exchange.
Insurance companies say the rates partly reflect an older and sicker population than they'd anticipated.
"The rate change reflects costs of health care and the amount of services we're seeing and some of the cost escalation in general," said Coventry Florida president Christopher Ciano.
"Some of the folks that bought for January needed greater care that first six months of year," said Brian Evanko, president of Cigna's U.S. individual market.
Even though November's enrollment will mark the second year of health insurance under president Obama's law, insurers say there's still a big learning curve. A glut of consumers rushed to sign up in the weeks before enrollment ended March 31. That means their insurance may not have been activated until May, giving insurers little understanding of the demographic or health needs of these new consumers and just a few months to determine prices for 2015.
"The real question mark is people who bought later in the cycle. We really don't have much experience from that yet ... so it's an incomplete picture," said Cigna's Evanko.
Insurers are spending major resources connecting consumers with services, going as far as setting up appointments with a primary care doctor, sending transportation to get them to appointments or even sending a nurse to the house to make sure a diabetic's glucose levels are in check. Those extra prevention measures can keep patients healthier but are also good for the bottom line if such preventive work keeps patients from seeking more expensive treatment in the emergency room or hospital.
"There are an awful lot of members that have not traditionally had health insurance and there's a lot of education that we're attempting to do now post-enrollment to take advantage of the benefits they purchased," said Ciano.
Consumers' age also played a role in price because insurers struggled to attract a healthier young adult population, which balances out the risk pool. About 28 percent of the nearly 1 million Floridians who signed up for plans on healthcare.gov fell into the crucial 18 to 34-year-old demographic.
Another key factor driving prices was consumers who were allowed to keep their insurance plans for another year, meaning they didn't enter the risk people. Insurance companies had counted on their business the first year.