Health Insurance Rates

Far more Californians than expected have bought plans through the state health insurance exchange. How sick they are will factor into next year’s prices.

By Chad Terhune
March 30, 2014, 5:00 a.m.

After months of head counts for Obamacare, it is the medical bills that will start to matter now.

Even before enrollment closes Monday, California has far exceeded its initial goals for signing up people under the Affordable Care Act. Although the sheer volume of 1.1 million policyholders is impressive for a brand new government program, the number of sicker patients is what’s likely to draw the most attention.

How sick they are and the size of their medical bills will be front and center in the weeks to come as insurers begin drawing up next year’s insurance rates, which will become public this summer.

The outcome — hefty rate hikes or more modest increases — in the pivotal state of California could help shape political races nationwide and the future of enrollment for President Obama’s signature law.

WellPoint Inc., parent of California’s leading health insurer in the exchange, Anthem Blue Cross, has already predicted “double-digit-plus” rate increases on Obamacare policies across much of the country.

Other experts discount the notion of soaring premiums because the Obama administration has programs in place to help health plans offset losses from higher-cost customers.

Meanwhile, most everyone involved is waiting to see how many additional people rush in by Monday, the last day to begin enrolling in Obamacare.

But health insurers aren’t wasting any time sizing up what patients are costing them now and what that will mean for 2015 rates.

Hunkered down in conference rooms, insurance actuaries are parsing prescriptions, doctor visits and hospital stays for clues about how expensive these new patients may be. By May, insurance companies must file next year’s rates with California’s state-run exchange so negotiations can begin.

“If rates in California increase by 20%,” said Robert Laszewski, a healthcare consultant in Virginia, “enrollment will go down and any healthy people will bail.”

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