CareFirst wants 25% rate hike to cover costs of sicker, older members

CareFirst Blue Cross Blue Shield has proposed raising rates by 25 percent for individuals and small businesses who purchase plans on the Maryland health insurance exchange next year.

Maryland's largest insurer said the hefty increase is necessary to comply with reform law provisions that prohibit insurers from denying coverage to people with pre-existing conditions and restrict insurers' ability to raise rates for older, more expensive members, The Washington Post's Wonkblog reported.

"We have always supported the intent and goal of the Affordable Care Act, but this is the practical result of it by opening the pool to everybody," CareFirst CEO Chet Burrell said, according to The Baltimore Sun. "The biggest driver of the increase is opening up the market to all comers. The premiums reflect that."

He added that these increases only apply to new health plans, leaving the roughly 60 percent of CareFirst's individual market members unaffected by the rising rates.

But despite CareFirst's claims that reform provisions essentially forced them into proposing such steep rates, other insurers participating in Maryland's exchange submitted lower increases to the state insurance department.

Kaiser Permanente, for example, proposed an average increase of only 4.3 percent. Aetna projected its small group premiums would grow between 12 percent and 16 percent, while UnitedHealth's small group premiums could increase by 15 percent, reported Kaiser Health News.

All proposed rate hikes are subject to review by the Maryland insurance department, which can approve or reject the rates. The department is expected to finalize rates in July.

"I'm sure we'll discuss this at great length with the regulators," Burrell told Wonkblog. "We will certainly make our views known on this."

To learn more:
- see the Washington Post's Wonkblog article
- read the Baltimore Sun article
- check out the Kaiser Health News article

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