Health insurance agents and brokers aren’t relishing the $3 million cut in their commission as a result of the Affordable Care Act, but something they may appreciate even less is having to tell their individual and small group clients they face premium increases in the double-digits.
There has been much speculation on how health insurance rates would fluctuate after Obamacare’s inaugural year, but new data is finally replacing rumors with fact. According to reports from insurance carriers in Washington state and Virginia, policyholders can expect their rates to rise by as much as 26% and 15% respectively.
Washington HealthPlanFinder will feature 12 insurance companies in the 2015 open enrollment season, with Molina Healthcare proposing the lowest rate hike at 6.8% and Time Insurance planning to increase premiums by 26%. In Virginia, Kaiser Foundation Health Plan of the Mid-Atlantic States will raise rates by 3.3%, while CareFirst Blue Cross holds the dubious honor of highest rate hikes at 14.9%.
Of course, the cost of healthcare—and consequently insurance—has been on the rise for some time. However, many insurers attribute the new costs directly to mandates put in place by the health law. In Washington, the Seattle Times reported that before the implementation of the Affordable Care Act, rate increases ranged from 9% to 18%.
The rate increases must be approved by state regulators before going into effect.
Other states have yet to disclose actual rate increases, but in general are expected to raise premium costs. For producers, that may mean revisiting coverage options for individual and small group clients to defray some of the increased cost.
Ingrid Martin, an account executive with CBIZ in Ohio, told Insurance Business in an earlier interview that exploring self-funding options is another way to help clients in a rough insurance client.
“Right off the top, that takes away some of those premium fees,” she said. “They’re now looking at these level premium plans to try to offset not only the fees, but also to better handle their claims. Our actuarial teams can help with that, thankfully.”
Wellness programs specifically designed to target where claims are coming in is another way to add value to clients, Martin said.
And as a last resort?
“I think most brokers are looking at minimum value plans to make sure employees have access to acceptable plans,” she said. “If some move to that, it reduces the cost for those that are young and healthy.”
You may also enjoy: "588% more for health insurance? It's true, survey says"
"CBO releases surprising premium estimates through 2024"
"How will the Affordable Care Act affect workers' compensation?"