Health care experts are bracing for insurance rates to jump next year as many of the federal Affordable Care Act’s major reforms go live, including one regulation requiring insurers to cover individuals no matter how sick they may be.
But exactly how much those premiums may increase is still speculation.
“I will tell you that rates will not be going down under the Affordable Care Act,” said S.C. Department of Insurance Director Ray Farmer. “Expect an increase.”
Patti Embry-Tautenhan, a spokeswoman for Blue Cross Blue Shield of South Carolina, the largest insurer in the state, said the company expects prices to go up, but could not estimate by how much.
“Most consumers will see an increase in their health insurance premium, particularly the young and the healthy,” Embry-Tautenhan said. “The regulatory process for approving the new products and premiums is not complete, so we cannot give specifics on our products and premiums at this time.”
The S.C. Department of Insurance is now evaluating insurance-plan proposals and rates submitted by companies for consumers to purchase on the federal health insurance exchange starting Oct. 1. Coverage under those plans would begin Jan. 1.
“We’ll have companies writing on the exchange and a large number of companies writing off the exchange,” he said.
One insurance company just announced that it won’t be offering insurance plans next year at all — at least not in South Carolina.
Ohio-based Medical Mutual, currently the second-largest health insurer for individual plans in South Carolina, recently said it is leaving this market because the Affordable Care Act makes it too hard to do business here.
“It takes a great deal of resources and effort to comply with (health care) reform,” said Medical Mutual spokesman Ed Byers. “New regulations put us in a position of focusing our efforts and spending our resources on our core Ohio business. It is critical for the company to do well in Ohio.”
Byers would not specify which Affordable Care Act regulations dictated the company’s decision to leave.
Medical Mutual insures about 28,000 South Carolinians through its Carolina Care plans. In a letter to members, the company said that the oolicies can be transferred to UnitedHealthcare.
Charleston lawyer and Carolina Care member Jason Luck said good riddance.
“I plan on rejoicing in the passing of the Carolina Care plan,” Luck said. “Their successor may be no better, but I’m ready for change.”
Luck complained of the high prescription drug prices under his policy.
“It was over 10 times what I used to pay. That left a really bad taste in my mouth,” he said.
Jason Czarniecki of North Charleston also finds his Carolina Care benefits substandard.
“It seemed like they didn’t cover hardly anything,” said Czarniecki, a software developer. Czarniecki said it’s up to his employer to pick another plan.
“I’m going to do whatever my company does because it’s free for me.”
Farmer, the S.C. insurance department director, said Medical Mutual isn’t the only health insurance company scaling back its footprint in the state.
“(Medical Mutual) is the only company that has informed us that they are leaving the entire marketplace,” Farmer said. “So far, we have several other companies that have indicated they may be non-renewing certain segments of their business in the individual policyholder market.”
Best estimates suggest that these changes would affect only about 1,500 policyholders, he said, far fewer than the number of Medical Mutual policies in South Carolina.
“We’re not going to really know how many policyholders will be affected until on or around Oct. 1,” because companies that plan to scale back, but not leave the state entirely, only need to give the department 90 days notice, Farmer said.
Health insurers who are leaving the state completely, like Medical Mutual, must give 180 days notice.
On Oct. 1, South Carolina residents can shop for health insurance online on the new federal health insurance exchange, also called a marketplace, at healthcare.gov.
This marketplace has been established by the Affordable Care Act, which requires residents to enroll in a health insurance plan next year or face future fines. Some residents may also qualify for tax credits to help pay for a plans, depending on their income.
Coverage for these plans purchased on the federal marketplace will begin Jan. 1, and enrollment is open through March 31.
Residents also can buy insurance plans from companies that choose not to offer a plan on the federal exchange.
“We’re better educated consumers if we just take the time to shop,” Farmer said. “Our marketplace is competitive. Our consumers can save money if they only shop.”
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