Mississippi’s insurance commissioner has approved a rate increase of 43 percent, on average, for one of two health insurers selling policies on the health exchange created under the federal health care overhaul.
Commissioner Mike Chaney said Thursday he approved the increase, beginning Jan. 1, for Kentucky-based Humana because actuaries project a sharp increase in costs and he feared Humana would leave Mississippi.
“I’ve approved this because it’s justified and if I didn’t approve it, they might have pulled out of the whole state,” Chaney said in a telephone interview with The Associated Press.
Humana intends to serve 28 of Mississippi’s 82 counties in 2017, leaving 18 counties. It’s the only provider currently planning to offer policies on the federally subsidized exchange in 16 counties, mostly in the Mississippi Delta and southwest Mississippi.
The Republican Chaney said Humana, which has about 13,000 policyholders on the federal exchange, initially sought a nearly 50 percent increase.
Chaney said he also approved a rate increase of roughly 7 percent on average for Magnolia Health, a unit of St. Louis-based Centene Corp. The commissioner said Magnolia has about 40,000 customers on the exchange. It also runs one of Mississippi’s two managed care networks for the state-federal Medicaid program.
Neither Humana nor Magnolia immediately responded to requests for comment late Thursday.
The average premium for the benchmark silver plan, where policyholders pay about 30 percent of costs, fell 8 percent from 2015 to 2016 in Mississippi. Premiums fell 19 percent the year earlier, according to the Commonwealth Fund.
Of Mississippians, 95 percent get subsidies cutting their costs, dropping the average premium to $91 a month, federal figures show.
UnitedHealth Group, which had been offering policies in all 82 counties and has 18,000 policyholders, has announced it is leaving the state after 2016. That will leave only 12 counties, mostly in a south Mississippi belt along U.S. 84, with more than one company offering coverage. Magnolia will be the only company selling policies in the state’s nine most populous counties, which contain 40 percent of the state’s residents. Chaney said an unnamed company has been awaiting federal approval for months to offer policies in all 82 counties.
Chaney said all three companies currently selling policies are making profits from the Mississippi exchange market. He said Humana is projecting large increases in costs for medical care and drugs. Magnolia, which has been charging higher premiums, is projecting lower cost increases.
Premium increases could also affect thousands of people who buy unsubsidized individual policies that are linked to the subsidized policies offered under the Affordable Care Act.
Going into their fourth year, the health law’s markets are still searching for stability. That’s in contrast to more-established government programs like Medicaid and Medicare Advantage, in which private insurers profitably cover tens of millions of people.
The health law’s nagging problems center on lower-than-hoped-for enrollment, sicker-than-expected customers and a balky internal stabilization system that didn’t deliver as advertised and was already scheduled to be pared back next year.
Insurers have sought large increases in a number of states, although it remains unclear what the nationwide change will be. From 2015 to 2016, premiums for a benchmark silver plan rose by a little more than 7 percent on average, according to administration figures
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