Health insurance companies across the nation and here in Pennsylvania are hoping to raise rates by as much as 10 times the inflation rate. Almost without notice, Pennsylvania’s Insurance Department is set to close the comment period on Sept. 2.
The increase in PA averages to 19%, with some variation between companies. In its explanation, the Insurance Department makes it clear that affordability does not factor into rate setting. Word for word, here is what the State of Pennsylvania’s Insurance Department web page says: “The goal of the rate review process is to ensure plans are priced appropriately and are not unfair or discriminatory.”
The rate-making process excludes consumers. There is no consumer advocate to represent rate payers, ask questions, or challenge what health insurance executives say. “The Requested Rate percent is usually available in early August. Once we have completed our review the Approved Rate percent will be posted to the website, usually in October. Consumers are invited to submit comments on any pending filings to ra-rateform@pa.gov. Comments submitted in writing may be posted to our website.”
Whatever “review” our government does is hidden from us. There is no public hearing, no public questioning, and not even a public meeting where people can tell our government what we think of rate increases that exceed the inflation rate.
The project cuts in subsidies for health insurance on the federal level compound the pending rate increases. The current “enhanced subsidies” do not expire until the end of this year. It is unrealistic to believe that the Trump Administration and Congress will continue the benefits put in place by former President Biden.
As the Peterson-KFF health care tracker points out, the reduction in subsidies will lead to two types of rate increases. The first is straightforward: if the federal government cuts its share of the cost of health care to ensure more working people have coverage, the rates paid by working people will go up.
The second rate increase will be caused by healthy people being priced out of the market. As there will be less financial help to ensure as many people as possible have health insurance, those who feel healthy enough to forgo health insurance will be more likely to give it up than those who are seriously ill. As a result, the percentage of people getting treatment will increase, forcing another round of rate increases.
The Keystone Health Plan, which insures 22% of those with health insurance in PA, is seeking a 23.5% rate increase. The proposal filed by the company makes clear that 15% of the insurance proceeds will be used to pay overhead.
The filing does not disclose if Keystone Health Plan East, a wholly-owned subsidiary of Independence Blue Cross (IBX), is being used to subsidize other Independence Blue Cross Plans. The filing does not list if Keystone Health Plan East pays for any of the advertising Independence Blue Cross airs, for any lobbying costs, or any of the corporate boxes IBX buys.
Nor does the filing explain why Keystone wants to set rates high enough to collect a 2% profit if the non-profit IBX owns it.
There is nothing in the filing that shows how Keystone is trying to keep its insured healthy to lower the need for expensive medical procedures, nothing that shows how AI is being used to keep overhead down, or how much Keystone is collecting to pay for its corporate officers, outside legal counsel, or marketing.
The filing does state, “The insurer expects its annual medical costs to increase 8.2%.” It does not explain why, if medical costs are going up 8.2%, the company wants to increase costs by 23.5%. But PA’s web page does make it clear that it has no intention of the public knowing why the company wants an increase 3 times the size of the company’s cost increases. The Commonwealth says:
“This document is prepared by the insurance company submitting the rate filing as a consumer tool to help explain the rate filing. It is not intended to describe or include all factors or information considered in the review process.”
If you are concerned about rising health care rates there are two things that you can do, call your state representatives and state senator and ask why they are allowing the Insurance Department to “rubber stamp” these rate increases without forcing the companies to prove it has done everything possible to make the increases unnecessary and two, email the State Insurance Department, ra-rateform@pa.gov, and object, demand your right to ask questions, get answers and have an advocate.
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