Watch out! Alabama health insurance rates could skyrocket next year

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Health insurance rates in Alabama could soon be skyrocketing for thousands of consumers who get plans through the Affordable Care Act federal exchange.

According to the Centers for Medicare & Medicaid Services, Blue Cross Blue Shield of Alabama has requested regulators approve an average 28 percent rate increase for individual plans. For example, Blue Choice Platinum/Individual plans could jump as much as 71 percent.

If approved, that rate increase will affect as many as 175,000 members of the state’s largest health and accident insurer, with smaller group plans increasing by a relatively moderate 13.8 percent, affecting another 225,000 members.

Also seeking a rate increase is UnitedHealthcare, which is asking its customers to pay an average 24.5 percent more in premiums next year. Depending on age and other factors, the increase for some members could be as high as 56 percent, affecting about 880 people.

Both companies blame medical costs for the proposed rate increases. Increased drug costs also accounts for a 5 percent increase in spending last year, Modern Healthcare Magazine says, a sharp rise compared to previous years of moderate health care cost growth.

Blue Cross Blue Shield, in a statement this week, explained that many factors led to the request. Rising taxes, fees, costs of medications, newer medical procedures and the number of health care visits that “exceeded projections” have forced the company to request higher premiums.

Increased rates could make difficult for many Alabama residents to afford health insurance purchased through the federal exchange.

Enroll Alabama navigator Doug Hoffman, a former hospital administrator, said many customers already struggle with high deductibles and co-payments; higher rates would make it even more difficult.

Unfortunately, Alabama does not review details of suggested health insurance rate increases prior to approval.

“It’s kind of like being in the doctor’s office and … told to close your eyes and just swallow,” Hoffman told AL.com. “Without being told what it is or why.”

There were rate increases last year, but only at about 8 percent.

There’s some good news, though; Alabama’s proposed rate increases aren’t as big as those sought by other states, said reporter Amy Yurkanin. New Mexico is asking for 50 percent, and Blue Cross Blue Shield of Tennessee wants 36 percent.

Blue Cross officials expect 93 percent of its revenue to be spent this year on medical costs, more than the 84 to 87 percent previously estimated. In that case, administrative costs would get a smaller share.

Critics of the proposal doubt claims that Blue Cross needs more revenue to stay afloat. They point to the company’s history of maintaining large reserves and offering huge salaries for top executives.

Regulators have the opportunity to deny any requests they consider unreasonable. A final determination will come later this year.

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