Nebraska's only provider of individual health insurance plans under the Affordable Care Act wants to raise its monthly rates by an average of nearly 17 percent, and some rates could increase by more than 50 percent, the company said Tuesday.
Minneapolis-based Medica unveiled its proposed 2018 rates as it sought approval from Nebraska state regulators. The company said a corresponding increase in federal subsidies would protect roughly 80 percent of consumers in the Nebraska market from having to pay more.
"We recognize that double-digit rate increases are not sustainable," said Geoff Bartsh, Medica's vice president of individual and family business. "Fortunately, the vast majority of Nebraska consumers are eligible for subsidies to help with these prices."
Bartsh said Medica will work to bring "rational prices" to the state and ensure the market remains stable over the long-term.
Medica spokesman Greg Bury said the company covers about 36,000 Nebraska residents right now, but that number is projected to surge to 90,000 next year.
Medica is the only insurer offering individual policies in Nebraska that comply with the federal health care law's rules. The law requires insurers to provide coverage for maternity care, routine checkups, hospital stays and other services.
Two other insurers, Blue Cross Blue Shield of Nebraska and Aetna Health, announced this year that they would drop out of Affordable Care Act-compliant plans for 2018. The companies cited multimillion dollar losses and uncertainty in the markets as reasons for withdrawing.
Medica outlined several scenarios in which consumers in Omaha could see their rates increase by 57 percent, before accounting for subsidies.
With the subsidies, the proposed increases would be much smaller for those who have to pay more. In one example, Medica said a 40-year-old Omaha resident who makes $48,000 a year would pay roughly $384 a month next year, which would be a 4 percent increase over the current rates. Without a subsidy, that resident would pay $579 per month, which would be a 57 percent increase.
Two other hypothetical Omaha residents — a 25-year-old earning $30,000 annually and a 60-year-old who makes $36,000 — would see no increase in their premium rates if they received subsidies.
In Lincoln, some rates would increase by about 10 percent before accounting for subsidies. With the subsidies, none of the sample rates outlined by Medica would change.
The rates are subject to change, but Nebraska Department of Insurance Director Bruce Ramge said most of the increases proposed in recent years have won state approval. Ramge said the department expects to set next year's rates by Nov. 1 at the latest.
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