The rate hikes will be announced in the coming months.
Health and Human Services (HHS) Secretary Kathleen Sebelius has confirmed that rates will increase in 2015 but, also says they will grow more slowly than in the past.
“The increases are far less significant than what they were prior to the Affordable Care Act,” the secretary said in testimony before the House Ways and Means Committee.
Her statement has confused insurance executives, who said it runs counter to the industry’s consensus about next year.
“It’s pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs,” said one senior insurance executive who requested anonymity.
One insurance official said his company expects to triple its rates next year on the ObamaCare exchange.
Where the Hikes Will Hit
The hikes are expected to vary by region, state and carrier. Those areas with older, sicker or smaller populations (with fewer electoral votes) are likely to be hit hardest, while others might not see substantial increases at all. For example: Iowa, which has a competitive Senate race this year, will see rates rise 100% on the exchange and by double digits on the larger, employer-based market.
Larger states (with more electoral votes) will likely continue to enjoy low rates in order to remain competitive.
Insurers will start filing their rate proposals with state officials soon.
Then this summer, insurance commissioners will approve and release the rates to the general public. Insurers may also leak their rates earlier as a political statement.
In some states, commissioners have the authority to deny certain rate increases, which could help prevent the most drastic hikes.
Either way, there will be a slew of bad headlines for the Obama administration just months before the election.