Mississippians on the state’s federally run health insurance exchange will see both increases and decreases in premiums starting Jan. 1.
Mississippi has two only two insurers on the plan, Humana of Louisville, Ky., and Magnolia Health Plan, a subsidiary of St. Louis-based Centene. Humana covers about 42,000 people and Magnolia about 20,000. The federal government, under the Affordable Care Act, subsidizes a substantial portion of the premiums paid by those insured through the exchange.
For people insured on the exchange by Magnolia, premiums are expected to go down by 25 percent. Humana’s Mississippi exchange customers can expect to pay 6.5 percent more on premiums.
Mississippians on group plans outside of the exchange can count on higher premiums as well. For instance, Blue Cross Blue Shield of Mississippi is proposing a 9.7 percent increase in premiums, according to Insurance Commissioner Mike Chaney. The commissioner reviews the group rates but has no authority to approve or reject them.
Humana has applied to continue coverage in 40 of the state’s 82 counties. Magnolia Health, which administers a 77,000-member Medicaid network around the state, serves the remaining counties. CEO Jason Dees said Thursday Magnolia has applied to add two more counties but declined to identify them.
Commissioner Chaney said several factors led Magnolia to ask for a decrease in rates. The chief cause, he said, was Magnolia’s “Medical Loss Ratio,” which requires that 80 percent to 85 percent of each premium dollar be spent on medical care. “Their (insured) population was relatively healthy,” which limited the portion of premiums spent on care, Chaney said. “They needed to lower their rates.”
Magnolia was not in the penalty range the ACA sets for Medical Loss Ratio, Chaney said. In fact, the insurer was “close” to meeting the federal ratio.
Another reason for the rate drop: Magnolia needs to approximately double its number of insured through the exchange. Otherwise, according to Chaney, it will continue to have difficulty giving its customers an adequate care network.
Another cause of Magnolia’s lagging number of insured compared to Humana is the state’s refusal to expand Medicaid to people with incomes from 100 percent to 138 percent of the federal poverty level. About 100,000 Mississippians fall into that category by either making an income too high for current Medicaid edibility but too low to qualify for the health care exchange.
Magnolia is also counting on a rate decrease to help attract Mississippians who are slightly better off financially than others on the exchange. This means targeting people have incomes within 200 percent to 400 percent of the federal poverty rate, according to Chaney. “The tax subsidies (from the ACA) decrease dramatically when you get above 200 percent” of poverty level, he added.
Humana’s “cheaper rates” put Magnolia at a disadvantage in attracting this category of insured, Chaney noted.
Humana spokesman Mitch Lubitz said the insurer exceeded its enrollment projections in Mississippi. Most of the 40,000 it signed up did not have coverage before implantation of the ACA, he said.
New enrollment for the Mississippi exchange begins Nov. 15.
Humana expects to charge its new and current customers premiums 6.5 percent higher than 2014 rates “primarily because of the health conditions of those who enrolled in Mississippi,” Lubitz said.
He also cited an increased use of health care and medical services by its exchange members, along with higher medical claims.