Florida’s largest health insurer is likely requesting rate hikes for Obamacare plans in 2015 due to “tremendous financial pressure” in the health care exchange, the company’s CEO said Monday.
“We will be under tremendous financial pressure initially, given the age, risk profile, and high utilization of the new membership,” Florida Blue CEO Patrick Geraghty told Kaiser Health News. “It is far from clear that large enrollment in the marketplace is a financially beneficial place to be.”
Florida’s Obamacare exchange has unsurprisingly attracted an older, less healthy customer based than the company expected. Florida Blue, the state’s Blue Cross and Blue Shield affiliate, has signed up a third of Florida’s Obamacare exchange customers, but only 23 percent of them were “young invincibles” between the ages of 18 and 34. That’s even less than the national average in Obamacare exchanges, 28 percent — which falls far below the Obama administration’s goal of 40 percent being young, healthy adults.
“It’s a concern certainly, as any market would want lower-age healthier individuals… because it balances the risk pool,” Geraghty said.
Florida Blue hasn’t released its premium proposals for 2015, but it has submitted a rate request to state regulators for approval. Humana proposed a 14.1 percent average hike for its Obamacare customers in HMO plans, while its PPO plans should expect a 2.2 percent average rate increase; Molina requested an 11.6 percent average decrease. (RELATED: Michigan: Obamacare Premium Hikes Up To 20 Percent)
Part of the reason for Florida Blue’s increased financial struggles is the Obama administration’s decision to allow an extension for health insurance plans that weren’t compliant with the health care law, Geraghty told Kaiser Health News. (RELATED: Tennessee, Louisiana Added To The List Of States Getting Double-Digit Obamacare Premium Hikes)
Close to 300,000 customers were allowed to keep their original health insurance under the extension, and 90 percent did keep them. The pool of customers who may have opted to purchase health plans on the exchange is likely healthier than any previously uninsured customers because they don’t have a pent-up need for medical care.
The Obama administration’s current extension was sparked by a national outcry against President Barack Obama’s broken promise that if you liked your health care plan, you could keep it. In states that approved the extension, it will allow customers to keep their noncompliant coverage through October 2016 — right before the next presidential election. But Geraghty said the last-minute change meant that Florida Blue underpriced their first year’s offerings of health care plans, because they were expecting a larger, healthier group of potential customers.