SEATTLE — People who buy their own health insurance in Washington state can expect rates to go up in 2015, but probably not as fast as insurance costs increased in the years before federal health care reform took effect.
The process of approving insurance rates in Washington has just begun, but the proposed average increase for the more than 320,000 people who buy their own health insurance is 8.25 percent, according to the Office of the Insurance Commissioner.
That number is likely to go down during the approval process, said Stephanie Marquis, spokeswoman for the insurance commissioner.
Because Washington is the first state to begin the rate-setting process for 2015, what’s happening here may offer a glimpse of what other states can implement for the second year of insurance under the Affordable Care Act.
“The rates that were filed this year, but have not yet been approved, surprised us because they were lower than we’ve seen in many years,” Marquis said.
A Washington, D.C.-based health care consulting company that analyzed the proposed Washington rates noted the smallest increases were proposed by the companies with the smallest market share.
Officials at Avalere Health speculated that companies with a small market share are keeping their rates low to be more competitive next year.
“Consumers enrolling through the exchange are extremely price sensitive,” said Dan Mendelson, CEO at Avalere Health.
Companies that sell individual health insurance in Washington state — both inside and outside of the health exchange — have had to do guesswork to estimate their costs for next year, said Eric Earling, spokesman for Premera Blue Cross, the insurance company with the largest market share in Washington’s individual market.
“Because of the timing for rate filings, we actually have very little information about claim costs” for 2014, Earling said, noting that some of their new customers just started their insurance last month.
So their proposal for 2015 rates was based mostly on claims from 2013 — from fewer people than they are insuring in 2014 — plus information they have about how changes in federal law will affect their costs next year.
For example, Earling said, the federal government is scaling down its reinsurance program, which helps companies deal with expensive claims. They are also facing an increase in federal taxes on health plans, and a federally required contingency fund is expected to cost them more in 2015.
Premera sells individual insurance under both Premera Blue Cross, which has about a 46 percent market share in Washington in 2014, and LifeWise Health Plan of Washington, with a 14 percent market share. LifeWise has proposed an 8.9 percent rate increase.
Other insurance companies with large chunks of the individual market — Coordinated Care Corp. and Group Health Cooperative — are both proposing rate increases of just over 11 percent.
All four companies had similar monthly rates in 2014 and would likely come even closer together in 2015 if their proposals were approved by the state:
Group Health’s average silver plan for 2014 was $280.47 and would be $312.50 in 2015 if their price increase is approved.
Premera would go from $300.94 to $328.03 for a similar plan.
LifeWise would go from $301.07 to $329.36.
Coordinated Care would go from $253.92 to $273.81.
New companies that plan to enter the individual market have proposed rates that mostly land above those currently in the market, topped by $428.80 for an average silver plan from Health Alliance Northwest.