Floridians who buy their own health insurance in 2017 are likely to see their premiums rise by an average of 19 percent over the current year, according to an analysis released Friday by the state’s Office of Insurance Regulation.
The average increase calculated by the state applies to all health insurance plans sold in Florida next year that comply with the Affordable Care Act’s minimum coverage requirements, whether those plans are sold on the ACA exchange at HealthCare.gov or off of it.
An estimated 1.53 million Floridians bought plans on the ACA exchange in 2016, according to the Department of Health and Human Services, and the great majority — about 1.42 million, or 93 percent — received a government subsidy to help make their coverage more affordable.
In Florida, 93 percent of people who bought their health insurance on the Affordable Care Act exchange at HealthCare.gov received an average subsidy of $305 a month to help make their coverage more affordable.
The state’s insurance regulator did not provide an overall average rate increase for plans sold solely on the ACA exchange. However, regulators did provide a breakdown by company. The averages ranged from a low of 11.7 percent for Health First to a high of 36.8 percent for Humana.
Among ACA-compliant plans sold off the ACA exchange, Cigna’s premiums will drop by an average of 1.5 percent while AvMed’s plan will rise by 27.3 percent.
Larry Levitt, a senior vice president for the Kaiser Family Foundation, a nonprofit health policy think tank, said several factors are driving bigger premium hikes on the ACA exchanges. Among them are rising healthcare costs and the expiration this year of the Transitional Reinsurance Program established under the health law to help stabilize premiums.
“That alone is pushing premiums up by 4 to 6 percent,” Levitt said of the reinsurance program, which expires at the end of 2016.
Levitt said prescription drug use also drives premium hikes. And the healthcare consulting firm Avalere reports that rates also are increasing because of a spike in hospital spending, with hospital services accounting for about 53 percent of premium growth.
According to Florida’s insurance regulators, the monthly premium for a subsidized plan sold on the ACA exchange in Miami-Dade for 2017 will cost $229 a month for a single person earning $27,000 a year, and $538 for a family of four earning $53,000 a year.
A total of 15 health insurance companies submitted rate requests in May for the state to review. Eight of those insurers planned to sell plans on the ACA exchange, though one, Harken Health, later withdrew. The remaining seven insurers are selling health plans off the ACA exchange, including Cigna, AvMed, Aetna and its subsidiary, Coventry Health.
Soon after Florida’s insurance regulator announced 2017 rate increases on Friday, the Obama administration issued its own news release echoing a report from Aug. 24 that found an estimated 82 percent of Floridians who buy coverage on the ACA exchange could still get a plan for less than $75 per month — even if rates were to rise by double digits.
Another factor driving premiums in 2017 is the departure of insurers from the ACA exchange, particularly UnitedHealth and Aetna.
“The less competition you have, generally, the higher premiums are going to be,” Levitt said.
But while the number of ACA exchange insurers has dwindled across the country, leaving counties in some states with only one insurer selling coverage, Florida remains a competitive market, in part because of its strong enrollment.
Some insurers are even expanding their presence on the ACA exchange for Florida.
Molina Healthcare, which sells plans in Miami-Dade, Broward and Palm Beach, announced in August that the company would enter five new Florida counties in 2017: Hillsborough, Polk, Osceola, Duval and Pinellas.
In a statement announcing the expansion, Leigh Woodward, a Molina spokeswoman, said the company’s success on the ACA exchanges is directly attributed to its experience with Medicaid, the public health insurance program for low-income and disabled Americans.
Woodward said Molina was expanding its presence on Florida’s ACA exchange, also called the Health Insurance Marketplace, to offer coverage for people who gain or lose Medicaid coverage because of income changes.
“We attribute much of our success in the marketplace to this strategy as our marketplace provider networks mirror our Medicaid networks to provide that continuity of care for members that may move back and forth between the two,” she said.