Individual health insurance policyholders in Mississippi paid 0.2% less for their plans in 2015 than they did the year previously, a new analysis from Freedom Partners shows.
The drop in rates may not sound like much, but it is the only drop to have occurred on a statewide basis in the US last year.
According to Mississippi Commissioner of Insurance Mike Chaney, the reason for the state’s comparative rate decrease is increased competition and a previous mistake in medical loss ratio calculations.
Magnolia Healthcare, a subsidiary of Kansas City-based Centene, lowered its rates by 25% because of a miscalculation on its medical loss ratio and other factors.
“That’s a correction on their part,” Chaney said.
The significant cut was enough to outweigh rate increases by Humana. UnitedHealthcare also lowered rates in 2015.
Thanks to that snafu, agents and policyholders should not expect continual decreases in the years to come, Chaney warned. In fact, the insurance commissioner says that while rates will be about the same in Mississippi in 2016, they may rise again next year.
UnitedHealthcare has announced it will stop selling plans on the federal insurance exchange in 2017 – a decision that will greatly affect rates due to lack of competition. The insurer has already implemented cost-saving cuts to broker compensation of up to 80% on commissions through 2015 and a complete lack of payments that began in January.
Without the incentive to sell from the carrier, insurance agents are directing their energy toward other carriers, which creates a further decrease in competition.
