Will Insurers Hike Rates? `Read Between the Lines`

Jenny Deam, Houston Chronicle

Health insurers have yet to go public with proposed rate increases for next year's Affordable Care Act plans, but they've hardly kept quiet in bemoaning losses and threatening to pull out of the federally mandated exchanges.

"You can read between the lines. In part, it's the insurance companies signaling to each other and to state regulators that they are planning to raise rates," says Cynthia Cox, associate director for health reform and private insurance at the Kaiser Family Foundation.

Requests for 2017 rate increases have begun to trickle in to the Texas Department of Insurance, spokesman Ben Gonzalez said. He said it was too early to announce specifics.

But insurers may have been telegraphing higher prices ahead:

Blue Cross and Blue Shield of Texas, the state's largest insurer, said in an email that it lost $321 million in 2015 in the individual market, less than the $400 million loss it reported for 2014. The company, which insures 880,000 members in the individual markets on and off the exchange in Texas, said it spent $1.26 for every $1 it took in.

The not-for-profit insurer said it brought in $3 billion in revenue last year in that market.

Chicago-based Health Care Service Corp., which operates Blue Cross and Blue Shield divisions in Texas, Oklahoma, Illinois, New Mexico and Montana, lost $65.8 million in 2015 in the individual market, a smaller loss than the $281.9 million loss reported in 2014, according to its year-end filings with the National Association of Insurance Commission. Overall revenue increased 13 percent last year to $31.2 billion with $9.4 billion in surplus profit, according to the report. But a spokesman said in an email its losses were actually higher at $592 million.

UnitedHealthcare, which said it plans to leave the exchanges in 2017 in Texas and most other states, has predicted it will lose about $650 million in the ACA marketplace this year.

Humana, warned earlier this month it plans "a number of changes ... to address the significant risk selection issues we have and continue to face."

The company reported a 46 percent loss in the first quarter of 2016, but analysts have said some that is due to expenses involved in Aetna's takeover bid, the company has said.

At Cigna, a spokesman said in an email that the company's participation in the exchanges is "contingent upon future market conditions and approval of our regulatory filings."

"We've expected to lose money on our individual and family plan business in the early years of ACA -- and we have," the statement said.

Aetna, which said it lost about 3 to 4 percent in its individual market plans in 2015, which include those on the exchanges, has said it hopes to break even in the individual market in 2016.

Ken Janda, president and CEO of Community Health Choice, a regional managed-care organization serving Harris and 19 other Texas counties, did not offer details on his company's rate increase requests except to say it would be "in single digits."

Industry-wide, however, Janda said insurers continue to struggle to price correctly in the individual markets.

"The growing pains ... are taking longer than we thought," he said.

Health care policy analysts say another factor contributing to the ominous vibe is that provisions put in place in the ACA's early years to stabilize an unknown market and protect insurers against losses are set to expire at the end of 2016.

But U.S. Department of Health and Human Services spokesman Jonathan Gold brushed aside predictions that consumers will be hit hard next year.

"It's the same worries that have not come to fruition in previous years," he said in an interview, adding that even if rates spike, most people will quality for subsidies that lower premiums.

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