FRANKFORT (AP) — Health insurance companies in Kentucky want to increase rates by an average of 17 percent next year, continuing a national trend of hefty hikes as insurers adapt to a market reshaped by President Barack Obama’s signature health care law.
The rate increases cover individual and small group plans. They do not include large plans offered by employers. Those rate requests will be released at a later date.
Kentucky is one of 13 states that operate its own health insurance exchange, a website where people can purchase discounted private insurance plans with the help of federal subsidies. Republican Gov. Matt Bevin plans to dismantle that state exchange, named kynect, by the end of this year. Its plans and customers would be shifted to the federal exchange HealthCare.gov.
Plans sold on the exchange are requesting rate hikes averaging 20 percent, compared to an average increase of 16 percent of plans sold off the exchange.
Save Kentucky Healthcare, a nonprofit started by former Democratic Gov. Steve Beshear to advocate for kynect, said in a statement “we believe the main reason why insurance companies are proposing higher rates is because of the uncertainty of the future of kynect.”
But Anthem health Plans of Kentucky, the only company that will offers plans statewide on the exchange next year, said the requested rate increase has nothing to do with the end of kynect. Instead, spokesman Mark Robinson blamed the increase on the failure of the Kentucky Health Cooperative, a nonprofit started with the help of a $58.8 million federal grant that folded last year. Its 51,000 mostly high-risk customers had to be picked up by other companies.
“The biggest issue for us honestly is the uncertainty of all of those members,” Robinson said. “How sick or healthy are they?”
But the rate increases, if approved by state regulators, do not guarantee double-digit increases in the monthly premiums people have to pay. The base rate is one of many factors companies use to determine how much someone pays in a monthly premium. Other factors include age, sex and where a person lives.
Last year, after insurance companies across the country requested double-digit rate increases in many states, the average monthly premium for plans sold on the federal exchange increased $4, to $106 per month from $102 per month, according to Jonathan Gold, a spokesman for the U.S. Department of Health and Human Services.
“People in Kentucky understand how the marketplace works, and they know that they can shop around and find coverage that fits their needs and budget,” Gold said. “The vast majority of consumers in Kentucky qualify for tax credits that reduce the cost of coverage below the sticker price.”
But many Kentucky counties only have one company offering health plans on the exchange. Some counties have as many as six plans to choose from, both on and off the exchange.
The largest requested increase was 65.1 percent from the Golden Rule Insurance Company, which is owned by UnitedHealthcare. That company does not offer plans on the state exchange. A spokeswoman did not immediately respond to a request for comment.
Bevin spokeswoman Jessica Ditto said the Affordable Care Act is failing and hurting the state, offering the rate increases as proof that the state needs “a sustainable healthcare model tailored for Kentucky.” Bevin wants to repeal the state’s expanded Medicaid program and replace it with a system similar to one in Indiana, where some Medicaid recipients pay small premiums for their insurance.