Major Insurance Conglomerate To Raise Rates By Double Digits

WellPoint surprised industry experts when it announced it will likely seek “double-digit plus” rate hikes. Insurers still have two months before they must submit their 2015 rates, so WellPoint’s prediction could impact other insurers’ rate-setting plans, Bloomberg reported.

Premium rates for 2015 will increase, although the rise in premiums will vary, depending on the region, state and insurer. The increases stem from the Obama administration’s many delays and changes to the healthcare reform law, FierceHealthPayer previously reported.

“On a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be in double-digit plus,” Ken Goulet, executive vice president for WellPoint’s commercial and specialty business, said at the company’s recent investor meeting.

Initially one of the loudest critics of the Affordable Care Act, WellPoint now stands to benefit significantly from the law–it’s the largest participant of all exchanges and already boosted membership by increasing its Medicaid participation.

What’s more, WellPoint CEO Joseph Swedish told analysts during an earnings call in January that its enrollment numbers have been “very consistent with our expectations,” adding that the company does “feel good about what we’ve seen thus far in the exchanges.”

That’s why the second-largest insurer’s announcement startled some analysts. “The double-digit increase surprised me,” Stephen Zaharuk, an analyst at Moody’s Investors Service, told Bloomberg. “If everything’s working according to plan, then the increases should be where the medical trend is, which should not be double-digit.”

Agreed! But what about the fact that Direct Care is effectively providing coverage for 80% of what patients need, and giving them steeply discounted labs/prescriptions/MRIs/CT-Scans…

Oh and we’re saving patients 30%-60% on their monthly insurance premiums because they can switch to a wrap-around plan and only use insurance in case of a rare emergency….

But other analysts believe WellPoint’s prediction reveals that the insurer is trying to play it safe. “They don’t know what the risk pool looks like yet, and until they get some experience, they’re going to be more cautious,” Ana Gupte, an analyst at Leerink Swann & Co., told the news outlet.

Obamacare is really starting to read like grade A bureaucratic meddling. Get more people to enroll in insurance by promising that it will be cheap. And then increase the rates. Oh, and face a fine if you renege on your insurance coverage.

It’s not like this hasn’t been pointed out before. Look at what ICD-10 and EMR subsidies have done for major corporations — some companies have seen insane revenue growth — from $1 billion a year in sales all the way to $3 billon per year — all because of government regulation.

Thanks, but no thanks. We’re going to fight to bring actual care that’s actually affordable — with as little insurance as possible.