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Friday, August 22, 2014

Rate filings for Arkansas Health Insurance Marketplace: carriers' proposals would decrease Marketplace rates in 2015

Posted By on Fri, Aug 22, 2014 at 5:18 PM

Carriers have submitted proposed 2015 rates for the Arkansas Health Insurance Marketplace — the health care exchange created via the Affordable Care Act — to AID for review. According to information previously available online via the Arkansas Insurance Department, the news is good: if the proposed rates are approved, they will lead to an overall decrease in insurance rates on the Marketplace. This includes all of the plans used by the private option, the state's unique version of Medicaid expansion. The information was not intended to be public but was posted online by AID's Rate Review division in error. It has now been taken down

According to this information: One of the carriers, Arkansas Blue Cross Blue Shield, which currently has the largest market share on the marketplace, proposed a rate increase of zero. This rate filing is still under review by AID. Celtic, selling in Arkansas as Ambetter, which currently has the second largest market share, proposed a rate decrease of 12 percent. Finally, QualChoice, which has the smallest market share, proposed a rate increase of 5 percent . The rate filings by Ambetter and QualChoice have been reviewed by AID and sent to the feds. (Note: the one carrier missing from this list is the federal multi-state BCBS — the data appears to include only a filing from the state Blues; the federal Office of Personnel Management handles the national Blues filing.)

Based on the 2014 market share on the exchange, if the proposed rates were approved, the net impact on rates on the Marketplace (the weighted average for those three carriers) would be a decrease of 3.5 percent. Given that premiums tend to increase annually, this would be huge news for the Marketplace and for the private option if it comes to pass. 

Before proceeding, a note of caution: these are not finalized rates. In the case of BCBS, negotiations may still be ongoing with AID (it's even possible that AID could push for lower*), and while AID has reviewed the rates for QualChoice and Ambetter, all of them still need to be approved by the feds. A second note of caution: AID declined to comment other than to state that the information had been posted publicly in error and was not finalized. The agency would not verify the accuracy of the information. A spokesperson for Blue Cross Blue Shield likewise would not confirm the accuracy of the information, referring me back to AID. So until we get confirmation, keep some grains of salt handy. 

The information on rate filings from the AID website, now taken down, also included proposed rates for off-exchange plans, including plans that are not compliant with Obamacare which consumers can keep through the fall of 2017 because of a bulletin issued by AID early this year.  Blue Cross proposes rate increases (not yet reviewed by AID) for some of these non-Marketplace plans, including one covering 45,000 people (16.5 percent increase) and one covering 32,000 people (15.7 percent). Again, to be clear, these are non-Obamacare plans are not connected to the private option. 

The information first came to light via a report released yesterday by PriceWaterhouseCoopers on preliminary 2015 individual market rate filings. PWC's report, which was intended as an initial look at the Obamacare exchanges, showed an average premium increase of 11.7 percent in Arkansas. Two notes: 1) PWC combined on- and off-exchange plans. If we look just at the exchange, the preliminary proposed rates represent a net decrease. 2) Even if we look at non-Obamacare plans too, the state is not in fact due for the big rate bump that you might guess from looking at PWC's map because PWC took a simple average across all non-group plans, not a weighted average based on the number of people enrolled. This isn't a knock on PWC (they told me in a statement, "We did this to be consistent across states that weren't reporting enrollment info. We're hoping to be able to share weighted averages in the future if/when more states provide the data."). But it majorly skews the results in Arkansas because of two tiny outliers: Humana, which covers just 515 Arkansans, proposed a rate increase of 22.1 percent and Time Insurance Company, which covers just 1487 people, proposed a rate increase of 50 percent (both are still under review by AID).  PWC's simple calculation suggested that in Arkansas the proposed rates for individual plans amounted to an 11.7 percent increase, one of the highest in the nation, but a weighted average of the individual plans amounts to only a 3.1 percent increase, one of the lowest in the nation (again, that includes both exchange and off-exchange; the plans on the Obamacare exchange show a net decrease by weighted average). 

AID was willing to comment on PWC's map: "The information reported by PWC is misleading. It mixes requested rates for plans sold both on the Marketplace and off the Marketplace, as well as plan types, and was based on information from filings that are not yet approved."

I asked PWC where they had gotten their data since AID had made no (intentional, anyways) public release. PWC pointed me to the Rate Review website (and told me that they had confirmed the information with the AID Rate Review division). When I then asked AID about the link, it was taken down within an hour. Here are screenshots of the carriers offering plans on the exchange: 

click to enlarge ar_blue_cross_1.png


click to enlarge qualchoice.png

click to enlarge celtic.png

*The numbers for Ambetter and Qualchoice have apparently been reviewed by AID and will now await federal approval. But to give you an idea of how preliminary the Blue Cross number is, based on the information from the website, Celtic actually initially requested a zero percent change in rates before ending up with a 12 percent decrease, and several other carriers ended up with lower rates than they had initially requested; meanwhile, Qualchoice requested no change for their exchange plans and actually got a 5 percent increase. 
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