Do Insurer Rate Filings Tell Us About the ACA/Obamacare in Mass? Not really
This morning the state of Massachusetts released quarterly rate filings from insurers for Q4 2013, and Q1 2014.
Some will interpret these as the first sign of the impact of the ACA on Massachusetts residents, but it is far from that.
A few thoughts on the filing:
1. These are base rate increases (or decreases), so they will not reflect the rating factor changes that are coming under the ACA. This is well worth mentioning since the ACA rating factor changes will be responsible for roller-coasting premiums +/-50%. As I discussed in this Pioneer blog post there are many other factors to consider. In other words these will not be the percent increases or decreases that residents will actually see next year.
2. This does show that the ACA will have very distinct impacts on different carriers and their plans in the Bay State.
3. The rates do not separate out premium trends for the individual and small group markets. It would be more helpful to see them split out as one could better understand the impact on small businesses– the side of the market where most of the premium impacts have been felt the last few years.
4.The premium base rates in Massachusetts are the highest in the country. So any change, especially an increase, will be felt strongly by the members of each plan. While other states will face the premium increasing pressure of guarantee issue and modified community rating regulations under the ACA; Massachusetts has had those on the books since 1996.
5. Plans in Massachusetts have aggressively adopted tiered and narrow network plans to try to keep premium costs down the last few years. It is unclear if that trend has increased in these rate filings, or if other product design changes account for some of the premium changes.
6. Some of the changes are coming as a result of plans having to adjust their actuarial values to be in line with new federal standards.
7. These filings are not indicative of the full impact of the ACA because they only include Q1 base rates for 2014.
8. The state of Massachusetts has received multiple “grace periods” from certain ACA regulations, so the full impact of those delays won’t be felt under 2016.
A better picture of what is to come under the ACA can be found in a recently released report conducted for the insurance industry by Wakely Consulting, that found the potential range of impacts on premium is from a low of –66% to a high of +97% (plus trend).
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Rates from the release:
Merged Market (Individual/Small Group) Base Rate Changes
| CARRIER |
3rd Qtr. ’13 |
4th Qtr ’13 |
1st Qtr. ’14** |
| BCBS MA, HMO BLUE |
3.6% |
0.6% |
1.1% |
| BCBS MA, INC. |
3.6% |
0.6% |
-24.6% |
| BMCHP, INC. |
-0.4% |
-0.9% |
-9.7% |
| CELTICARE |
-2.5% |
-0.8% |
4.0% |
| CONNECTICARE |
4.2% |
Not Complete |
Not Complete |
| FALLON HMO |
3.6% |
4.2% |
Not Complete |
| FALLON INSUR. CO. |
3.2% |
3.6% |
Not Complete |
| HARVARD HMO |
2.8% |
3.9% |
4.4% |
| HARVARD INSUR CO |
1.4% |
3.2% |
4.9% |
| HNE |
2.3% |
3.3% |
4.3% |
| MINUTEMAN |
NA |
NA |
NA |
| NEIGHBORHOOD |
-2.4% |
-3.2% |
-9.8% |
| NETWORK HEALTH |
NA |
0.0% |
-6.5% |
| TUFTS HMO |
3.6% |
4.6% |
4.7% |
| TUFTS INSUR. CO. |
3.5% |
4.5% |
4.9% |
| UHC INSUR. CO. |
2.5% |
4.9% |
4.9% |
| UHC of NE |
NA |
NA |
NA |
|
Avg. Weighted Inc. |
2.6% |
2.1%* |
1.8%* |
*Reflects the average weighted increase for only those rates placed on filed.
**1st Qtr Small Group/CY ’14 Individual
