Most Kentucky insurers seeking rate increases for next year

Gallup's new poll shows Kentucky has gone from the 39th highest uninsured rate among adults to the 11th lowest

A Gallup poll showed Kentucky went from the 39th-highest uninsured rate among adults to the 11th-lowest after enacting federal health care reforms.

All but one of the health insurance companies that sell policies on the individual market in Kentucky are asking the state to permit them to raise rates for 2016, according to information made public Wednesday by the Kentucky Department of Insurance.

The most dramatic increase requested is from the Kentucky Health Cooperative, a provider that launched last year with funding provided by the Affordable Care Act. The co-op is asking for a 25.1 percent increase. That’s on top of last year’s 20 percent rate hike.

The requested rates — which are averaged per company among the plans it offers — are not final, and the state insurance department expects to complete its review by late July, according to spokeswoman Ronda Sloan.

Of the five companies that currently offer individual policies through Kynect, the state-based health insurance exchange created through the federal health care law, four are seeking to raise rates in 2016. WellCare Health Plans of Kentucky, which offers individual policies both on and off the exchange, is actually seeking to lower its average plan rate by more than 9 percent.

Anthem is asking for the second-highest rate hike, at an average of 14.6 percent, for its individual plans both on and off Kynect. CareSource KY is seeking to raise its rates by an average of nearly 12 percent for plans both on and off Kynect. And Humana, the Louisville-based insurance giant, is asking for an average increase of 5.2 percent — significantly lower than last year’s hikes of 9 percent for its PPO individual plan and 15 percent for its HMO plan.

This information had not yet been posted to the U.S. Department of Health and Human Services’ website as of Wednesday afternoon, but once that happens the public will be able to review the aforementioned companies’ justification for the proposed increases.

In addition, two companies that don’t provide plans through the exchange — Celtic Insurance Company and Golden Rule Insurance Company — are asking for increases of 9.93 percent and 11.5 percent, respectively.

The release of Kentucky’s rate increase data comes a day after the federal Department of Health and Human Services released new rate data for the 37 states where it operates health insurance exchanges. Requests in some of those states showed volatility and uncertainty among insurers still trying to adjust to changes in the individual market brought about by the Affordable Care Act.

In Tennessee, for instance, BlueCross BlueShield is asking for a 36 percent increase, citing higher utilization than it had forecasted. And Alliant Health Plans is asking for an average increase of 38 percent for its Georgia plans — and, for one, an 85 percent rate hike.

Kentucky isn’t seeing nearly such tumult in its individual insurance market.

“I think we were very pleased with that,” Sloan said. “If you look at even surrounding states, a lot of them had higher increases.”

Kentucky is one of 23 states that tapped a $2 billion pool of federal funding made available through the health care reform law to create a co-op, whose plans are managed by members. The co-ops were designed to drive competition in the individual market in states where there was little; two years ago, when it launched, only Anthem and Humana were providing individual policies.

A spokeswoman for the Kentucky Health Cooperative did not immediately return a request for comment on the proposed rate hike. Sloan stressed that the request is preliminary, adding that the co-op claims the biggest share of Kynect’s non-Medicaid enrollees.

More than 421,000 Kentuckians signed up for health insurance through Kynect in 2014, the vast majority of them through an expanded Medicaid. As of May 15, nearly 106,000 Kentuckians had obtained private insurance through the exchange.

Competition also seems to be improving in the state’s individual market, as more than a handful of additional private insurers are looking to sell plans next year.

According to the filing, six more insurers will begin offering individual plans in 2016 — three of them on Kynect. Aetna Health, Bluegrass Family Health, and United HealthCare of Kentucky will offer plans through the exchange, while Bluegrass Family Health, Freedom Life Insurance Company, and Time Insurance Company will sell individual plans outside of the exchange.

“For the first time, all Kentuckians will have at least three private insurance companies to choose from,” said Gov. Steve Beshear. “Three new insurers will be offering private plans on Kynect as well as through insurance agents. That means more competition and more choice for consumers, which is good news.”

The mix of individual insurance plans offered on and off Kynect is nearly 50-50. This year, according to data provided by the Kentucky Department of Insurance, there were 82,549 plans sold outside the exchange and 71,817 sold through the online marketplace.

Here is the full list of requested rate increases for 2016:

Courtesy Kentucky Department of Insurance

Courtesy Kentucky Department of Insurance

Beshear, whose implementation of Kynect has brought him and the state national notoriety, cautioned against drawing conclusions before the rate increases are finalized.

“We do expect that some plan rates will go down, some will go up and some will stay close to the same as last year,” he said. “When open enrollment begins this fall, Kentuckians should seek information about their individual plans, not average costs.  System-wide averages don’t give a good picture of what an individual’s out-of-pocket costs may be.”

Beshear added that because most Kentuckians who buy insurance on the exchange receive federal subsidies, it’s difficult to generalize the effect of any proposed rate increase.

*****UPDATE 9:03 a.m.*****

Humana spokeswoman Kate Marx responded late Wednesday to a request for comment on the insurer’s requested rate increases:

“Humana exchange members in Kentucky will see only a modest average increase in their premiums for 2016. Rate changes are influenced by shifts in the marketplace, such as changes in the health status of the commonwealth’s population, and increasing or decreasing cost of medical services in health care provider rates and the medical services the population is utilizing.”