Health insurance premiums to increase

COLUMBUS — The Ohio Department of Insurance says that individual consumers buying health insurance on the federal government’s health insurance exchange for Ohio will pay an average of 41 percent more than they did in 2013.

In addition, ODI confirmed previously-released preliminary calculations that insurance companies’ costs to provide individual health coverage will increase by 83 percent.

“Ohio has traditionally had a more competitive health insurance market than other states with a wider range of prices and choices — from simple, high deductible coverage to comprehensive, full service plans,” Lt. Gov. Mary Taylor said. “That level of diversity is essentially outlawed under Obamacare so Ohio’s rates and premiums are going up significantly, and going up more than in other states where prices were already high.”

Premiums increase 41 percent

The department utilized a National Association of Insurance Commissioners (NAIC) report of premiums reported by Ohio companies at the end of 2012 to compare premiums. Individual exchange plan premiums are expected to increase on average by 41 percent in 2014 compared to 2013, while exchange plans for Ohio’s small businesses will increase on average by 18 percent.

For individual health insurance plans, a total of 12 companies offering 200 different plans have been approved by the department for the exchange.

Open enrollment for the exchange will begin Oct. 1.

The exchange

For small group health insurance plans, six companies offering 184 plans have been approved to sell on the exchange. Based on premiums for the current individual market, plans in Ohio today cost on average $236.29 per month compared to $332.58 in 2014.

For the small group market, today’s premiums average is $341.03 per month compared to $401.99 in 2014.

An example of the difference between premium and the cost to provide coverage is that premiums do not include cost sharing paid by the consumer, whereas cost includes both the cost to the company to provide the coverage and the cost sharing paid by the consumer.

Costs to insure increase 83 percent

Estimates from a Society of Actuaries study released in 2013 showed Ohio’s current average cost to provide individual health insurance coverage is $223.

Based on the rate filings approved by the department, the average cost to provide coverage for individuals purchasing health insurance on the exchange in 2014 is $409 representing an increase of 83 percent when compared to the Society of Actuaries study.

During the two-month review process, the department requested changes to submissions that in some cases resulted in rate adjustments. Ohio law requires all companies selling products in Ohio, including on the exchange, to justify rate submissions and any rate changes for 2014 by using sound actuarial judgment.

The intense review process the department conducted (as it does with all insurance products sold in Ohio) is to protect consumers from rates that are too high and to protect against company insolvency in which rates are too low and companies are unable to pay a consumer’s claim.

Ohio is one of many states to recently release final exchange rate numbers and each state’s experience is different. Ohio’s rates are going up while some other states are seeing rates remain stable or even decrease as the ACA drives rates across the country closer together.

For states where prices were already much higher and that had more coverage mandates, rates are not increasing as much. In Ohio, where rates have been among the most competitive in the country, rates are increasing significantly as consumers are faced with fewer options and a higher level of required coverage.

“These kinds of significant costs increases are bad for job creation and why the governor and I continue to call for the repeal and replacement of this flawed law with reforms that improve access by lowering costs.” Taylor said.

Ohio said ‘no’

“Ohio said ‘no’ to running the federal government’s health care exchange in our state and ‘no’ to federal takeovers of both our health insurance regulations and our Medicaid eligibility process. As the problems with this law continue to appear even the federal government has begun to balk, with its recent announcement to delay the employer mandate for a year. Hopefully, it’s just the beginning of more such news and an eventual total rethinking of this law.”

In 2010 the ACA, which includes sweeping changes to America’s health insurance system, became law. It includes the creation of health care exchanges in which individuals and small business owners in every state can purchase subsidized coverage.

Misleading

State Sen. Capri S. Cafaro, (D-Hubbard), released the following statement, “Director Taylor engaged in faulty math, misleading statements and omissions to mischaracterize the benefits of Ohio’s health insurance exchange. ODI’s inflated numbers failed to mention that Ohioans participating in the exchange will choose between three levels of coverage and the actual cost will be much lower because of tax credits.

“It’s unfortunate that Ohio has chosen obstructionism instead of cooperation. States that have engaged with implementing the Affordable Care Act are seeing insurance rates drop. The premiums for plans covered by New York’s exchange are expected to fall by 50 percent and small business owners in Los Angeles will see their premiums drop by an average of 13 to 17 percent because of rates negotiated by California’s exchange.

According to the federal government, initial open enrollment on the exchange is set to begin Oct. 1 with coverage becoming effective Jan.1, 2014.

To learn more about the health care exchange, visit www.healthcare.gov. Ohioans with questions about insurance can call the department at 800-686-1526.

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