Wall Street Journal: Insurers Win Big Health-Rate Increases

Insurers Win Big Health-Rate Increases

Some state regulators say new costs justify hefty increases under the Affordable Care Act


Louise Radnofsky and

Stephanie Armour

Aug. 26, 2015 6:40 p.m. ET


At a July town hall in Nashville, Tenn., President Barack Obama played down fears of a spike in health insurance premiums in his signature health law’s third year.

“My expectation is that they’ll come in significantly lower than what’s being requested,” he said, saying Tennesseans had to work to ensure the state’s insurance commissioner “does their job in not just passively reviewing the rates, but really asking, ‘OK, what is it that you are looking for here? Why would you need very high premiums?’”

That commissioner, Julie Mix McPeak, answered on Friday by greenlighting the full 36.3% increase sought by the biggest health plan in the state, BlueCross BlueShield of Tennessee. She said the insurer demonstrated the hefty increase for 2016 was needed to cover higher-than-expected claims from sick people who signed up for individual policies in the first two years of the Affordable Care Act.

Several regulators around the country agree with her, and have approved all or most of the big premium increases sought by the largest health plans in their states for the new sign-up season that begins Nov. 1.

Not all states have made their rate decisions, and some have approved relatively modest increases. A number of the states with lower average increases this year had higher rates to begin with. Some also fared better with enrollment under the law. Insurance premiums vary from state to state, for a number of reasons including regional disparities in the costs of care.

Still, the upsurge is likely to be a big talking point not only during the three-month enrollment season, but through the 2016 campaigns, where GOP opponents of the law are expected to use it as a defining issue against their Democratic rivals.

The law provides for government subsidies in the form of tax credits for some consumers who buy insurance on their own because they don’t have coverage through a job or government program such as Medicare. Those subsidies will blunt the impact of price increases for individuals who get them, but the tab is picked up by the federal government.

Earlier Coverage

White House spokeswoman Katie Hill said rate review processes, which were beefed up under the law, had helped lower proposed premiums “in a number of states.” She also said that under the health law, it was easier for customers to switch to a new insurer.

“Last year, more than half of re-enrolling customers on HealthCare.gov actively shopped and selected a new plan, something that wasn’t possible for many consumers prior to the ACA due to the risk of being charged a higher premium or denied coverage entirely due to a pre-existing condition,” she said.

Tennessee’s Ms. McPeak said she’s required to protect state residents by blocking unjustified increases but also guaranteeing that health plans stay financially sound. “Politics, and any opposition to the ACA, doesn’t have anything to do with it,” she said. “Do I wish they were lower? Absolutely, because I know what it means to consumers.”

Kentucky Insurance Commissioner Sharon Clark approved the 25.1% increase requested by the Kentucky Health Cooperative, the largest insurer on the state’s insurance exchange. Kentucky has taken a more supportive stance toward the health law, including operating its own insurance exchange rather than using the federal government’s HealthCare.gov.

“We’re lucky” by comparison to Tennessee, Ms. Clark said.

Oregon’s Laura Cali allowed an average 25.6% increase for Moda Health Plan Inc., the biggest plan on that state’s exchange. In Ohio, Lt. Gov. Mary Taylor approved a 14.5% increase from Medical Mutual. In Michigan, BlueCross BlueShield won approval for the average 11.4% increase from insurance director Patrick McPharlin.

In Idaho, insurance director Dean Cameron said that an average 23% increase by Blue Cross of Idaho Health Service Inc., was disappointing but “not unreasonable” and that he didn’t have the power to stop it.

The 2010 federal health law overhauled the way insurance is priced and sold, requiring companies to allow anyone to buy policies, regardless of their medical history and with only limited variation in premiums based on their age.

Many of the most popular plans in the country offered low rates for the first and second year of the law’s rollout, unsure what to expect but eager to snap up the new business. That was especially true in Tennessee, which had some of the lowest premiums in the U.S. initially.

Now, insurers have found that business has been more costly than expected. They’ve incurred steep losses, the American Academy of Actuaries said in a recent paper, and some programs designed to cushion them against high-risk enrollees are ending.

Some people will be able to switch plans and pay a modest increase from 2015, according to an analysis of proposed rates earlier this year by the consulting firm Avalere Health LLC.

For the Obama administration, that means a stepped-up campaign this fall to persuade people to return to HealthCare.gov and shop around in the coming open enrollment season.

The administration said late Tuesday it would automatically renew the coverage of people who signed up through the site last year and don’t come back to it by Dec. 15 this year.

The administration said that for the current year, about half of the site’s users returned. Of those, about half switched insurance providers and half opted to stay with the one they had.

States that were able to keep rate increases down breathed a sigh of relief this week. In Indiana, Anthem Inc.had asked for, and was granted, a 3.8% average increase. In Virginia, Anthem reduced an initial request of 13.2% to 8.6%. In Arkansas, BlueCross and BlueShield was approved for an average increase of 7.15%.

Write to Louise Radnofsky at louise.radnofsky and Stephanie Armour at stephanie.armour


DC Health Link Launches Universal Doctor Directory 1.0

DC Health Link Launches Universal Doctor Directory 1.0

Wednesday, August 19, 2015

Spanish-language Doctor Directory enters beta testing.

Important tool helps customers easily find doctors and participating plans

Today, the DC Health Benefit Exchange Authority (HBX) announced the launch of the DC Health Link Universal Doctor Directory 1.0, and the introduction of a Spanish Language Beta version on DCHealthLink.com. DC Health Link’s Universal Doctor Directory makes it possible for customers to easily search for doctors – in English and Spanish

Bridj, a New Ride-Sharing Service, Takes on Buses in D.C.

Bridj, a New Ride-Sharing Service, Takes on Buses in D.C.

By Trey Sherman

Some D.C. commuters are ditching Metro for a new ride-sharing option. Bridj is a pop-up van service that is hailed with a smartphone app. News4 Transporation Reporter Adam Tuss took a ride and reports on how it works. (Published Tuesday, Aug. 4, 2015)

Another new ride-sharing service has launched in D.C. to combat crowded streets and public transit — and this time, it’s taking on buses.

Bridj is an on-demand van service. It uses location-based technology to transport up to 14 people to and from downtown Washington D.C. during morning and evening commute hours. The ride costs between $2-$5 and comes with free Wi-Fi service.

Various transportation alternatives have caused a decline in Metro ridership over the past two years, while D.C’s population has been on the rise.

“I think it will be a better commute for folks,” Bridj’s marketing director Ryan Kelly said in an interview. “It’s a very different experience from Uber and Lyft because we aggregate people going in the same direction, which is how we are able to offer a lower price.”

Similar to existing transportation services, commuters drop a pin at their origin and destination. Bridj will then provide a list of ticket options that you can book for a single trip, or an entire week.

You enter your credit card information, reserve a seat and catch Bridj at the designated pickup spot along with other passengers traveling to a nearby area. You can track the vehicle’s arrival on a real-time map until it arrives. The van then takes all passengers to a central drop off location.

Bridj currently picks up and drops off in areas surrounding Cathedral Heights, Glover Park, Dupont Circle and downtown D.C. It added the Petworth, 16th Street Heights and Brightwood neighborhoods this week.

“D.C. offers even greater opportunities than Boston,” where the company is based, Kelly said. Boston and D.C. are currently the only cities Bridj serves.

Kelly praised D.C. for its density, mixture of business and residential districts, and percentage of residents without cars — 38 percent, the second highest in the U.S. only behind New York City.

Kelly said Bridj will focus on expanding within the District before venturing into Maryland and Virginia, “but there are neighborhoods where the value of Bridj would be extremely popular.”

Kelly mentioned Alexandria, Tysons Corner, and Falls Church as possible places for expansion, but made no promises.

Others in the D.C. area are encouraged to visit the website and add their commute to their system so Bridj knows where to expand next. There, you can also see an interactive map of commutes people have already put in the system.

And the company is sweetening its deal for its D.C. expansion: it’s offering new users the first 10 rides free with the code “nextstop."

Published at 4:47 PM EDT on Aug 4, 2015

As cloud of corruption passes in D.C., regular dysfunction back in spotlight

As cloud of corruption passes in D.C., regular dysfunction back in spotlight

The Washington Post

By Aaron C. Davis August 2 at 7:32 PM

Outside the mayor’s conference room, the line of D.C. cabinet secretaries and agency directors stretched down the hall. Each studied notes and prepared excuses, like schoolchildren awaiting a turn before the principal.

Inside, D.C. Mayor Muriel E. Bowser (D) had begun the two-hour inquisition. At issue, however, was something more serious than a schoolyard dispute: more than $1.3 billion in mishandled taxpayer contracts.

“If there’s a problem like this,” Bowser told one of her new agency heads, “it’s your fault from here on out.”

After corruption charges in recent years brought down three council members and left a cloud of suspicion hanging over former mayor Vincent C. Gray, the District and its new mayor are trying to get back to the less salacious work of rooting out everyday dysfunction in D.C. government.

Early targets for Bowser are the late, botched and sloppy contracts that have led to cost overruns, rotten school lunches, deadly failures at the fire department and scores of chances squandered annually for better deals for taxpayers.

Bowser entered office as many of her predecessors had, promising to do better at watchdogging the District’s dealings with its many private contractors.

Whether her approach will succeed remains to be seen. Her effort began in earnest in June with the creation of a contracting review board, chaired by Bowser herself.

The plan took a step forward last week when Bowser’s administration delivered a report to D.C. Council Chairman Phil Mendelson (D) detailing how in her first months in office — but mostly during the final years under Gray — the District repeatedly failed to execute contracts competently. The report spells out candidly that poor planning and coordination and shoddy work by executive agency staffers were most frequently to blame.

Two contracts that have come under public scrutiny this year involved food service at D.C. schools and the procurement of tablets to be used in dispatching emergency fire and medical responders.

Chartwells, the food-service vendor, has settled a lawsuit alleging that it provided rotten food to students. D.C. officials are now working to prevent the company from walking away from the final option year of its contract.

In the case of the tablets, a glitch in the new 911 fire dispatch system was blamed in part for a delay in sending paramedics to the home of a choking toddler who later died near American University.

Bowser’s effort to improve the city’s contracting process is aimed at avoiding such fiascos in the future.

In many cases, the failure to draft, vet and execute contracts on time has reduced the council’s ability to scrutinize agreements with vendors. Lawmakers end up being asked to approve contracts after the fact, often after services have begun, and the District could be held liable if the council does not give the green light.

Such retroactive approvals have happened more than 40 times already this year, with new contracts for city bike-share equipment, road salt for winter storms and management of more than $1 billion in health-care services.

Mendelson has strongly criticized Gray and, more recently, Bowser for truncating the council’s oversight role by thrusting contract decisions onto lawmakers after the fact.

“The intent behind it is excellent,” Mendelson said of Bowser’s plan for more internal scrutiny of her administration. “Particularly the way they will be looking at what went wrong with getting these contracts done in a timely fashion.”

The report, however, also touched a nerve between Bowser and Mendelson.

To “improve efficiency,” the report by Bowser’s new chief of procurement, George Schutter, recommended eliminating council review of many contracts.

“Some of the recommendations are self-serving in that they would expand the mayor’s authority” to sign contracts, said Mendelson, who, along with the city’s first elected attorney general, Karl A. Racine, has already chafed at numerous other proposals by Bowser to consolidate power in her office.

In the first meeting of Bowser’s Procurement Accountability Review Board, in June, the logjam of getting contracts to the council was a repeated theme. So was taking responsibility — sort of.

The Washington Post was given access to the review process, on condition that the information would not be made public until shared with the council.

A half-dozen agency heads, including Bowser’s chiefs of transportation, housing, general services and technology, each acknowledged that their departments had not effectively completed contracts that had been launched under the Gray administration.

It was an excuse that will get harder to make the longer Bowser’s team is in office.

Looking over the list of dozens of late contracts as the meeting ended, Bowser looked up at her staff and said the challenge was clear:

“We have got to do better.”

Aaron Davis covers D.C. government and politics for The Post and wants to hear your story about how D.C. works — or how it doesn’t.