Major Insurer Backtracks Its Prediction of Double Digit Obamacare Rate Increases
Wellpoint, the country's second largest insurer, backtracked on recent statements that it expected to see double digit rate increases in 2015, reports The Washington Post.
Wellpoint, the country's second largest insurer, backtracked on recent statements that it expected to see double digit rate increases in 2015, The Washington Post reports. Last month the company told investors that all of their carriers would likely see rate increases in the double digits (after saying in January that enrollments were what they expected). But on Wednesday chief executive Joe Swedish said the question of how much rates will rise is “not an easy one to answer,” and will vary by market and product. Insurers will submit their 2015 premiums starting in May.
Wellpoint's report falls in with what Aetna, another large insurers on the exchanges, has said. The company declined to comment about possible rate increases in March (excluding an email statement from a spokeswoman: “It’s too early to say.") but last week Aetna's chief executive Mark Bertolini said increases would range from "the very low single digits" to "some that will be over double digits," according to the Post. Meanwhile UnitedHealth Group is also "leaning toward increasing its participation in the public exchanges" next year, according to The Wall Street Journal.
Fear of a double digit premium increase reached a fever pitch last month. A series of anonymous insurance executives told The Hill that they expected premiums to "skyrocket" in 2015, due to the law's rollout and the low number of 18 to 34 year olds on the market. These predictions were made before the end of the enrollment period — when the average age of enrollees went down in a “meaningful fashion,” as Wellpoint's chief financial officer Wayne DeVeydt said according to the Post — and in response to Health Secretary Kathleen Sebelius's claims that premiums would rise, but not significantly.
One anonymous official said at the time his company was planning on tripling rates, and Sebelius's comments were “pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs.” We'd agree — estimating premium costs before collecting enrollment data is a bit shortsighted.