Insurers are looking to raise rates for their coverage beginning in 2015
Some health insurance providers in Louisiana have submitted rate increase proposals that have raised red flags among the state’s regulators. The rate increases are for policies that will be sold through the state’s exchange in 2015. Consumers will be able to purchase these policies beginning on November 15, when the exchanges latest open enrollment period is scheduled to begin. The rate increase proposals coming from insurers are to be reviewed by the state’s insurance regulators.
Blue Cross and Blue Shield wants to raise rates by as much as 19.7%
Blue Cross Blue Shield of Louisiana is one of the companies that is seeking to raise rates. The company is looking to raise its rates by as much as 19.7%. This rate increase would affect some 52,000 people throughout the state. Other large insurers aim to increase rates for their coverage by a similar margin. The problem, however, is that regulators may not have the authority to reject rate increases that they find to be unjustified.
Insurance Commissioner petitions Legislature for expanded authority
Louisiana Insurance Commissioner Jim Donelon has petitioned the state’s Legislatures to provide him with the power to reject rate increases that are proven to be unnecessary. While the Affordable Care Act requires each state to review any rate increase over 10%, not all states have the regulatory structure needed to approve or deny large rate increases. In California, for instance, insurance regulators can deny excessive rate increases in the auto insurance sector, but not in the health insurance sector.
Rising cost of medical care and growing frequency of claims is putting insurers in a stressful financial situation
Insurers are looking to raise rates in order to better manage the growing costs of medical care. According to Blue Cross and Blue Shield of Louisiana, more people are accessing medical care than in the past, meaning that the insurance provider is receiving more claims. Each claim represents a financial loss, especially considering how expensive medical care actually is. In order to balance out these losses, insurers are raising rates.