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CareFirst asks for average rate increase of as much as 30.4 percent

CareFirst proposes steep rate increase for its inidividual health insurance

The state's largest health insurer has asked Maryland regulators to let it increase premiums by as much as 30.4 percent on average for policies that take effect next year.

CareFirst BlueCross BlueShield said the rate increases on its PPO and HMO plans for individuals are needed to help balance the costs of caring for patients who are older or have chronic conditions.

The insurer was among five companies that asked the Maryland Insurance Administration for changes in rates on individual plans. The insurance companies also requested increases or drops in the premium rates for plans they sell to small businesses.

The Maryland Insurance Administration released the requests Friday.

A review of the requests, including public comments, will take place before the administration decides whether to grant the increases, said Insurance Commissioner Al Redmer Jr.

By law, rate changes that are found to be excessive or inadequate must be rejected, he said. Last year, the administration substantially reduced CareFirst's requested rate increases.

"The law is very clear that the benchmark that we use in either approving, modifying or denying a rate modification is that the rates have to be actuarily justified," Redmer said.

The proposed rates are for plans individuals buy directly from insurers, through a broker or on a state exchange created under the federal Affordable Care Act. The rates are not for insurance coverage offered by large employers or companies that are self-insured, so they would not affect most people.

CareFirst is not the only insurer seeking a rate increase. Kaiser Foundation Health Plan of the Mid-Atlantic States and Evergreen Health Cooperative asked for increases on individual plans of 4.8 percent and 9.7 percent, respectively. Cigna and UnitedHealthcare of the Mid-Atlantic requested rate reductions.

CareFirst and Evergreen officials said they have a better understanding of costs now that people have been enrolled under the federal health reform law. Previously, they could only guess how many people would enroll and how healthy they would be.

"CareFirst has predicted for some time that rates would need to climb from artificially lower levels due to the characteristics and needs of the population that has actually enrolled," the company said in a statement.

Evergreen officials said its program is still a bargain and that it has been able to keep costs from rising too much through preventive care that has kept people out of hospitals and emergency rooms, where care is more expensive.

Under the proposed rates, a 40-year-old man who does not smoke would pay a monthly premium of $251.66 for the lowest cost silver plan with Evergreen. A CareFirst HMO would cost $306.11 and the CareFirst PPO would cost $365.89.

CareFirst said it needs its request to be approved in full because it did not get the increases it sought the previous two years, Redmer said. For 2015, CareFirst received approval to increase premium rates by 9.8 percent for its HMO and 16.2 percent for its PPO. It had requested 22.8 percent and 30.2 percent increases.

Officials with Maryland's health exchange noted that subsidies are available to help people pay for plans. Nearly nine in 10 Marylanders who shopped on the exchange were eligible for financial assistance this year, up from eight in 10 last year.

For its small-business plans, CareFirst has requested an average rate reduction of as much as 16.6 percent.

State regulators will decide on rates by the end of the summer.

amcdaniels@baltsun.com

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