Insurers seek rate increases
Health insurance premiums for policies sold through the Alabama exchange could be rising by a significant margin. Blue Cross Blue Shield of Alabama, which sells policies through the exchange, is requesting a rate increase averaging 28%. This rate increase would affect individual plans. For the Blue Choice Platinum – Individual plan that the insurer offers, rates could go up as much as 71%. The rate increases are expected to affect some 175,000 people.
Average cost of UnitedHealthcare plans could grow by 24.5%
Another insurer is also looking to raise rates for coverage next year. UnitedHealthcare is requesting an increase in premiums averaging 24.5%. For some policyholders, premiums could grow by as much as 56%, while others may see a much smaller increase in premiums. Rate hikes from UnitedHealthcare are expected to affect approximately 880 people. Higher rates would take effect next year.
Rising medical costs are pushing premiums higher
Both insurance companies are citing growing medical costs as the justification for higher rates. Medical care has been growing more costly in recent years and insurers have begun seeing larger financial losses as a result. In order to recover from these losses, insurers have been raising premiums, but this is not always a popular option as it places more financial strain on consumers. Other factors that are pressuring insurers to raise premiums have to do with taxes and fees imposed by the state and federal governments.
Rate requests have yet to be approved
The rate requests from the insurers have not yet been approved or rejected. State regulators could reject the increases if they are found to be unreasonable. Many people are unable to afford the cost of health insurance coverage, even for policies that are purchased through the state’s exchange. Premium increases could make this problem worse, but insurers must find ways to accommodate a market that is becoming more financially risky. For Blue Cross Blue Shield of Alabama, as much as 93% of its revenue is expected to be spent on medical costs this year. Addressing the issue of expensive medical care could help resolve the financial strain that has become a staple of the insurance market.