With the implementation of the Affordable Care Act, insurers are unsure of how the new rates will impact their bottom line. It is predicted that the rates in 2015 will increase but it is unknown as to how much they will increase by. The increase will depend primarily on the number of people enrolled in the Affordable Care Act and their medical needs.While the 2014 rates are finalized, insurers must submit their rate increase requests to the federal government in late May or early June for 2015. However, this task is challenging to many of the insurers since they don’t understand much of the demographic enrolled in their plans. They are dealing with only 1/3 the information that they typically have due to the new regulations required in offering coverage under the Affordable Care Act. The medical history of their enrollees is mostly unknown since the open enrollment period required insurers to accept individuals despite medical history and pre-existing conditions. Thus, the insurers may be responsible for providing medical coverage to people who were once denied insurance making it more costly. Some insurers have started seeking prescription history and records to determine how many of their applicants use ongoing treatment options.
So how does this affect 2015 rates? Some insurers have discussed doubling their costs in 2015. Keep in mind that the insurance marketplace has to abide by the “reinsurance” law preventing high cost members from pushing up the rates of coverage. The rates definitely won’t go down but consumers and insurers are still trying to guess the rate of increase.
Fortunately, many insurers believe that the wave of applicants in March may be healthier than those who signed up for coverage in January. In order for the law to be successful, insurers need the healthy applicants to offset the costs of the other less healthy participants who have higher medical costs. There is still little information as to whether the applicants in March were “healthier” but it is believed that they were younger. This is a good sign for many insurance companies as they look at enrollment numbers and determine costs of coverage for 2015.