Florida Blue, the state’s dominant health insurer, snagged more than one in three consumers on the health law’s exchange this year, but many could face rate hikes as the carrier struggles with an influx of older and sicker enrollees, said the company’s top executive.
Several factors could drive up rates next year — including a paucity of younger and healthy enrollees and a greater-than-expected surge in people seeking expensive health services, CEO Patrick Geraghty said in an interview.
“We will be under tremendous financial pressure initially given the age, risk profile and high utilization of the new membership,” he said. “It is far from clear that large enrollment in the marketplace is a financially beneficial place to be.”
Nonetheless, Geraghty said Florida Blue remains committed to the individual health insurance market where it is the only carrier serving consumers in every county in the state.
The nonprofit Blue Cross and Blue Shield affiliate added 339,000 customers through the Affordable Care Act’s federal marketplace this year— or about 34 percent of the nearly 1 million who signed up in the state, Geraghty said.
Republican critics of the health law have predicted Obamacare rates would spike in 2015 as health plans try to make up for higher costs associated with mostly older and sicker people. But in the past,health insurance premiums have increased virtually every year in the individual market.
Florida Blue would not reveal its proposed 2015 rates, which were submitted to state regulators last month. State officials are expected to disclose the rates for the nearly dozen carriers in the marketplaceat the end of July. Open enrollment begins Nov. 15 and goes through Feb. 15.
To date, only two insurers have disclosed their 2015 rate proposals. Humana proposed an average 14.1 percent increase in two separate filings for its health maintenance organizations (HMOs), while its preferred provider organizations (PPO) have a 2.2 percent average rate increase. Molina has proposed an 11.6 percent average rate decrease for all its plans.
Florida Blue has been one of the nation’s most fiscally stable health insurers. In 2012, the latest year for which data is available, Florida Blue achieved its 24th consecutive profitable year, as the company made $217 million net income on about $9 billion in revenue. It has about 4 million customers in Florida across all lines of health insurance.
About 23 percent of those who bought exchange policies from Florida Blue this year were in the 18-to-34 age category, Geraghty said. That compares to 28 percent nationally. Initial federal projections were that 40 percent of enrollees nationally would be young adults.
Geraghty said he knew the percentage of young adults signing up in Florida would be lower than the national average because of the state’s older population. Still, 23 percent was lower than the company projected.
“It’s a concern certainly, as any market would want lower-age healthier individuals … because it balances the risk pool,” he said.
It was also harder to sign up younger adults in Florida, he said, because they faced higher rates under the law’s requirement that the oldest person buying coverage pay no more than three times the rate paid by the youngest enrollee.
Another factor that could lead to higher premiums in 2015 is that demand for expensive health services exceeded the insurer’s expectations, Geraghty said.
The Obama administration’s decision earlier this year to allow people to stay in so-called “grandfathered” plans until October 2016 also added financial pressure, he said.
About 300,000 Florida Blue customers were given that option and 90 percent kept the grandfathered plans, Geraghty said. Because they are healthier as a group than the broader market, the company underpriced its marketplace plans, he said.
Despite these challenges, Geraghty said he was generally pleased with the results of the exchange’s first year of enrollment. The company had about 50 percent of the individual state insurance market in 2014, and today has about a 40 percent share, including people buying on and off the exchange. While losing some market share, the company gained many new members.
Sabrina Corlette, senior research fellow at Georgetown University’s Center on Health Insurance Reforms, said Florida Blue’s assessment of its 2014 projection errors is telling. “They may be trying to prepare the public and the market for an increase in prices,” she said.
She said she was not surprised the insurer was below the national average for young adult enrollment, given the state’s demographics. She said the company also may have struggled to get younger adults because the Blue Cross and Blue Shield brand tends to attract older people who trust it.
Geraghty said he believes the law is here to stay.
“With many people benefiting from new coverage and subsidies, it will be difficult to reverse the tide,” he said. “The better path going forward is working on … how to improve the ACA so it works best for the largest number of our citizens.”
–Phil Galewitz, Kaiser Health News
Outsider says
Sorry to disappoint, but this is not news; it’s exactly what was predicted. It should only be surprising to the consumer of Obama government lies.
JoJo says
Time will tell how these companies fare with the ACA???
NortonSmitty says
Sorry to point out to you that the average monthly premium for Obamacare in Florida is $69. If it goes up 50% it will still be way cheaper and with better coverage than we were getting before. Sorry those government lies you were told about were the real lies.
Rob says
Norton right you are.
Many didn’t have ANY coverage before. So some of something is better that a whole lot of nothing.
Funny thing is those people who didn’t have any insurance believed those politicians who told them it was a bad thing. ” Well you know that Obama Care is not good for you or the country, and by the way I have the best health insurance you tax payer’s money can buy”
Let's see now says
Outsider, I’m not quite sure what plans YOU are talking about, but I sure didn’t see any like that. to cover my family and I it was well over $600 per month, $5000.00 deductible and LESS coverage. MY brother-in-law as a single male was $200.00 per month, $2500 ded and hardly any coverage. So please, do tell, $69 rates can be found where? Expedia.com? Obama, thankfully HAS to go this year. Yippie!!!!!
Bill says
Is that $69 the total cost of the insurance plan or is it the average premium a individual pays?? There is a BIG difference in the two. IF it is the total cost of the plane then that is a GREAT 4 for such BUT if the total cost is not $69 then what and who pays the other $$ of it?
Anonymous says
But the LIAR in CHIEF obama promised over and over his screwball “affordable” health care scam would save Americans money!!!!
Remember this democrat party scam from you vote!
m&m says
You’re lucky if they only raise your rates. I was cancelled and had to scramble around for new insurance. This is all due because of that worthless piece of crap we have in the White House..
NortonSmitty says
The Democrats have sunk so low as to force me and my family to accept reasonably priced health coverage that may save lives and money for us all? And in return they expect us to actually vote for them? YOU BASTARDS!!!
Obama 2014 says
Your plan was cancelled because it was sold to you after the ACA was law. Your insurance company sold you a policy that was against the law because they believed the law would be found unconstitutional. If you had the same policy before the ACA then your policy would not have been cancelled. Be mad at the worthless piece of crap you call an insurance company.
Floridiots says
Thank you, Flagler Live, for pointing out that Blue Cross made $217 MILLION NET INCOME on REVENUE of $9 BILLION. How many of YOUR claims were denied, not paid, etc., by companies sitting on MILLIONS of dollars? And that is how insurance works – you pay them but they won’t pay your or your doctor’s claims. It’s a FOR PROFIT BUSINESS which means the bottom line comes first, not your health.
Florida will NEVER be profitable for the insurance companies because Florida set itself up years ago to capture the retiree market. Can you name the States with no income tax?
Obama 2014 says
69.00 rates are for single people or people without children that make less than 25K a year.
I found one for a friend that was $25.00 a month and they had NO coverage at their job.
I just did a search on healthcare.gov and for a family of 4 two adults at 40 years, one teenager and a child of 5 making 65k under BlueCare Everyday Health 1477 came to 380.00 with a 9,000 total deductable. I am sure if you dug more you could find a even better plan. A Platinum Plan that covers everything is $646 with a 1,700 family total deductible. I really don’t know where you guys get your information but I am getting tired of having to fact check all the GOP Obamacare lies.
https://www.healthcare.gov/find-premium-estimates/#results/&aud=indv&type=med&state=FL&county=Flagler&age0=40&age1=40&age2=10&age3=5&age4=5&employerCoverage=no&householdSize=5&income=65%2C000
Obama 2014 says
$69.00 a month and the rest is a tax credit. The same tax credit that 1% get thanks to the Bush Tax Cuts. However, the GOP doesn’t seem to be concerned about that tax credit, Only when Obama became president did the jobs start coming back.
confidential says
Thanks to Obamacare my child now has health insurance that could not afford for years. Cost around $188 /month includes dental and a policy rider covers the hospitalization deductible of $5,000 if needed. Before Obamacare any insurance would cost my child upwards of $600 a month! Also my girlfriend family has realistically priced insurance with Obamacare as were gouged before. What are Outsider and others here talking about, against Obamacare and Democrats?
Before I reached my Medicare age I was paying close to $1,000/month in Health Care Insurance as a self employed.
The Health Care Industry is run no different than the Oil Industry…is like pulling gold from the ground and gouging us at the pump, breaking us up financially and our families too.
How come all the Obamacare detractors don’t go and instead attack Medicare and Health Care 1% fraudsters like Ricky Scott and hospitals overcharging and stealing from the publics/government good Health Care..?
Outsider says
It wasn’t I that claimed that. The simple fact is that when you pay 188 bucks a month and get all that coverage it only means one thing: someone else is picking up the tab. I chose to wait to have kids until I could afford to raise them. My reward for that? I get to pay for everyone else’s choices.
Rune says
Your child still can’t afford it. It’s being subsidized by individuals and families who are now paying inflated premiums and oop expenses for coverage they may never use, on top of the ones they couldn’t afford either, *prior to Obamacare.
Contrary to popular belief, the lower incomes weren’t the only ones struggling with insurance costs.
A.S.F. says
Confidential–The answer is: Selfish people don’t disapprove of anything that personally benefits THEM. In fact, they feel entitled to it. They just disapprove of anything that might benefit anyone else, if they feel they may be called upon to contribute anything towards that end, even it is for the public good.
Franklin Tower says
Well, unfortunately, my wife’s premiums will go up from what we could not afford to astronomical. Due to health issues, she has the gold plan with Blue. Her employer still does not offer group health insurance. Obama gave employers a pass but dumped on individuals. I have never voted Republican and I am chomping at the bit to vote Republican in November. A loyal Democrat since 1970, I am now a very irritated independent and I suspect that there are a lot more like me.
Outsider says
Oh, there we go with those evil profits again. I’m just kind of curious; did you work all your life for free, or did you get paid (a profit?) Why is it that an individual can go to work and earn money, and it’s perfectly okay to get a promotion and a raise, but if a group of people do it, it is considered evil?
Sherry Epley says
Let’s set the record straight. . . BCBS was my carrier before the ACA was implemented and they cherry picked only the most healthy people to cover. If you had any major claims during the year, they would not cover your AT ALL ANY MORE! Even though we submitted no claims, they raised our rates 20-30% every year! Obamacare is NOT to blame for this. . . Blue Shield Blue Cross IS!
nomad says
“The nonprofit Blue Cross and Blue Shield affiliate…made $217 million net income on about $9 billion in revenue.”
This is another one of those “nonprofits” that make income/profits off govt subsidies and tax breaks from the taxes paid by taxpayers who are mandated to purchase their services/products. These nonprofits (and for profits) also influence and make policies that are beneficial to them via revolving door access to Capital Hill and the White House. Least we forget, the health insurance industry were the ones to craft ACA and they are reaping the benefits of their handiwork.