Georgia: *Approved* 2016 Rate Hikes may be slightly lower than requested (?)

When I ran the numbers for Georgia's individual market in August, I didn't have a whole lot to work with. The requested rate changes were only publicly available for carriers representing around 222,000 enrollees, out of a state-wide individual market of (likely) around 750,000. The weighted average increase for the companies I had data for was around 18.3%; all I knew about the rest of them is that they had asked for hikes of under 10%. My best ballpark estimate was that Georgia residents were likely looking at roughly a 10-13% increase overall.

Today I ran across an article in the Rome News-Tribune which gives some of the final, approved rate hike numbers for 2016...but just bits and pieces, nothing to hang your hat on:

Many Georgians buying individual or family health insurance will see double-digit increases in their premiums for 2016.

Insurance rates approved recently by Georgia Insurance Commissioner Ralph Hudgens range from hikes of 27 percent and 29 percent for Alliant Health Plans’ individual policyholders to slight decreases for a few plans.

An analysis by Bill Custer, a health insurance expert at Georgia State University, found the average increase for a person purchasing an individual or family policy next year is in the double digits, both for the insurance exchange and those in the regular market.

The variations show that consumers should “wait and see and prepare to shop around’’ for coverage, Custer said. “We’ll see average increases that are going to be higher than the last four years.”

Health costs in general are rising 8 percent to 10 percent, Custer noted.

...An agency spokeswoman said that two insurers lowered their proposed rates after the state’s actuarial review. Laura Wright, the spokeswoman, said that Blue Cross and Blue Shield of Georgia lowered its rate from a 12 percent proposal to 8.6 percent for one plan, and cut the rate for another plan from a 3.1 percent hike to a decrease of 0.2 percent. UnitedHealthcare reduced the increase for one of its plans from 18.6 percent to 13.2 percent.

Like I said, not much to work with here, but there's a few items to compare:

  • Alliant: Originally requested a 37.9% average increase for around 11,000 enrollees (contributing about 0.53% to the total weighted average increase). The article suggests that this was cut dramatically to "27-29%". If that applies to all 11K, that would reduce Alliant's portion to around 0.39%, cutting the state-wide total by about 0.14 points.
  • BCBSGA: Originally requested a 16.4% increase for about 85,000 people (contributing 1.81% to the total). The article says that they cut their rate on "one plan" from 12% to 8.6%, and for "another plan" from 3.1% to an 0.2% rate decrease. Of course, without knowing how many people were enrolled in those 2 plans, or how many others BCBS is offering (there could be dozens), it's impossible to tell whether their overall rate hike request changed at all. Assuming that a 3 percentage point cut was typical of the company as a whole, their overall request might have been slashed from 16.4% to, say, 13.4%. That would reduce their total contribution to around 1.48% of the total average...a reduction of 0.33 points.
  • Finally, it says that UHC cut their increase from 18.6% to 13.2% on "one of" their plans. Again, for all I know they also ended up with even higher rates on all of their other plans. Then again, UHC only has around 10K enrolled total, so no change of theirs is likely to impact the overall average that much.

In general, it sounds likely that Georgia's average rate hike will be a few percentage points below the original requests...but even that was just an educated guess to begin with. Prof. Custer claims that the average increase will still be "in the double digits", so I'll stick with my 10-13% estimate.

UPDATE: I've heard back from Professor Custer; he confirms that his analysis of the approved rates is "pretty close" to my estimate of the requested rates, so around 10-13% sounds like it's on the mark.