State releases proposed rates for individual-market, small-business health insurance

Major health insurer CareFirst BlueCross BlueShield has asked the state to let it increase its rates in the individual marketplace by as much as 30 percent on average next year, but two competitors want to lower what they charge people who don't get coverage through an employer.

The requests were released Friday by the Maryland Insurance Administration, whose officials emphasized that they could require modifications. The agency cut significantly the rate increase CareFirst had requested for this year.


"The rates posted today are proposed, not approved," said Maryland Insurance Commissioner Therese M. Goldsmith in a statement.

When the state does make a final decision, likely in late summer, it won't affect most Marylanders. At stake are the rates for people who aren't covered by larger employers — those who buy coverage individually and those getting it through a small employer. That includes coverage purchased via Maryland's health insurance exchange.


Insurers proposed different rates for the individual and small-employer markets. The year-over-year change was more dramatic in the individual market as insurers jockeyed for position — and pored over new data — after the rocky first year of sign-ups through Maryland's exchange.

"They're kind of reassessing where they were relative to their competitors and making an adjustment," said health economist Bradley Herring, an associate professor at the Johns Hopkins Bloomberg School of Public Health.

CareFirst requested increases for its individual-market plans that ranged from 23 percent to 30 percent on average. But it was starting on the lower end of the market.

CareFirst said in a statement that enrollment in its individual-market plans "reflects an older and less healthy population" than it had projected in its rate proposal for the current year.

"This is the single greatest cause of increases over 2014 levels," the company said in its statement.

CareFirst said it expects its rates for next year "will remain highly competitive."

A comparison of proposed premium rates for 40-year-old nonsmokers suggests that its offerings would fall in the middle of the pack.

Prices for its lowest mid-range "silver" plan aimed at that demographic would be $273 a month. Kaiser Permanente came in the lowest at $231 a month, while All Savers Insurance Co. is the highest at $354.

Evergreen Health Co-op's lowest-cost silver plan for that demographic is a proposed $235, near the bottom. It's one of two companies asking to lower individual rates — Evergreen requested a 10 percent reduction on average and Kaiser wants an average 12 percent decrease.

Kaiser, noting that it has experience on the exchange that it didn't have last year, attributed its proposed reduction to an expectation of rising customer numbers and "the value of our integrated delivery system."

No companies said they would drop out of the market, and two are poised to enter next year: UnitedHealthcare of the Mid-Atlantic, with a proposed $265 monthly charge for 40-year-old nonsmokers, and Cigna Health and Life Insurance Co., which proposed a $352 monthly charge for that demographic.

Maryland Health Secretary Joshua M. Sharfstein said he saw reason for enthusiasm in the proposals, despite the requested increase from dominant player CareFirst.


"You clearly see competition increasing," he said. "You have more entrants into the market, more companies, and you have some companies trying to position themselves with lower rates. I think over the long run that's going to be very good for Maryland consumers."

Pointing to a federal study that ranked Maryland's rates among the cheapest in the country this year, Sharfstein said, "I anticipate that our rates will still be among the lowest."

Dr. Peter Beilenson, founder and CEO of Evergreen Health, said he wasn't surprised to see the shakeout in the individual-market proposals this year.

"A couple big guys underpriced the market," said Beilenson, a former city and Howard County health officer. "And we're seeing corrections."

That will make the individual market more competitive next year for insurers, he said. Rates in the small-employer market already were closer together this year, he said.

So were the proposed rate changes for next year in the small-employer market — though even there, the spread was fairly broad.

UnitedHealthcare proposed the largest decrease in that market, at 2.6 percent. Coventry Health and Life Insurance Co. proposed the largest increase, at 19 percent.

Beilenson said Evergreen Health's small-employer niche has done well in sign-ups this year and proposed no change in rates for next year. He's feeling much more bullish now than he was at the beginning of the year, when problems with the exchange hurt enrollments.

Now, he said, "we're not dependent on the exchange."

"We've learned our lesson, and we've diversified our offerings," he said.


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