Daines Misstates Obamacare Price Increases
In a speech on the Senate floor last week, Montana Senator Steve Daines lambasted President Obama for what he says are huge increases in the price of health insurance in Montana, but he didn't get the facts exactly right.
An independent analyst says actual price increases nationwide will be much smaller than those that are grabbing headlines.
Last week health insurance companies across the country were required to notify state and federal regulators if they want to raise prices by 10% or more for any of the policies they sell on healthcare.gov next year.
The four companies that sell those policies in Montana all said they were planning to raise prices on some of the plans they sell, some by as much as 47%.
Here's Senator Daines' response in his floor speech:
"Blue Cross Blue Shield, which is Montana's largest insurer, that boasts 255,000 consumers in the state, is asking for an average increase of 23% for Montanans enrolled in individual plans."
That's not actually true. Blue Cross Blue Shield sells more than 50 different individual health policies in Montana, but it's only asking for 23% price increases on two of those policies. The company lists no other policies that it plans to charge more than 10% more for next year than this year.
Last year, the price of health insurance premiums in Montana went up an average of 1.5 %, one of the lowest price increases in years.
Senator Daines went on to say that PacificSource is asking for an average premium increase of 31%. PacificSource sells 52 different health policies in Montana, and is asking for price increases of greater than 10% on only two of them.
"While some of those plans may be going up a lot in price, that doesn't mean a lot of enrollees are necessarily affected," says Caroline Pearson, senior vice president at Avalere Health, a private consulting firm in Washington, DC.
Pearson's firm has surveyed insurance company rate filings in several states, and says that the policies that are seeing potential double-digit rate increases are outliers, not the norm. The policies held by the majority of people in the states they've surveyed, Pearson says, probably won't increase that much.
"We have seen that about 6% average rate increases are expected for 2016," Pearson says. "And when we look at some of the low cost plans in the market, we're seeing anywhere from a 5% increase for the lowest cost plan available, a 1% increase for the second lowest cost plan available. So we're really looking at very modest increases, very consistent with what we saw from 2014 to 2015."
Peason also says that the price increases reported last week, big or small, are by no means final, either. They're requests, and in a lot of states, including Montana, insurance commissioners have the ability to reject price increases they judge unjustifiable. The actual prices of health plans being sold on Health Care.gov won't be final until this fall.