Insurance companies file for rate increases on individual policies sold in the state
Health insurance companies in Alaska have filed for significant increases in premiums for the coverage that they offer for individual, non-subsidized coverage. State law tasks the Alaskan Division of Insurance with regulating rate increases, and the agency has, thus far, granted approval for rate increases averaging 37%. Rate increases will affect policies that go active in January 2015 and these rate increases will affect policies sold through the state’s health insurance exchange.
Division of Insurance comes under fire for its rate review process
Alaska’s Division of Insurance recently came under heavy criticism from the Department of Health and Human Service. The federal agency suggested that the state’s rate review process was subpar, which lead to high insurance premiums. State officials argue that the rate review process is effective, however, suggesting that the rising cost of medical care and the state’s relatively small insurance market are the reasons behind higher rates.
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Premera Blue Cross seeks to raise rates to cover the losses it experienced this year
There are two companies that have filed for rate increases in Alaska, one of which being Premera Blue Cross. The company notes that higher premiums are needed to offset the losses it had seen in 2014. From January to the end of June, the insurer had more than $7 million in medical claims coming from only 33 of its health care plans. The company is paying an estimated $723 per policyholder in medical claims every month and receiving approximately $540 in monthly premiums.
Cost of medical care is growing alongside health insurance premiums
As health insurance premiums grow, the cost of medical care is rising as well. New medical treatments are becoming more commonplace and some of these treatments are making use of expensive technologies. Medical professionals are also becoming more expensive, which is pressuring hospitals to charge more for the care that they provide. These costs are weighing on insurance companies, forcing them to raise rates for individual policies in order to offset the losses they are beginning to see in the market.