The proposed 2021 premium numbers for small group and individual plans have been submitted to the OIC. We're diving into the details and looking ahead to what's the future looks like for carriers, counties and rates in Washington state.
The insurance carriers’ 2021 proposed small group and individual plan premiums have been submitted to Washington’s Office of the Insurance Commissioner (OIC). While it will take at least a few months for the back-and-forth between the carriers and the Commissioner to shake out, the proposed rates give us a starting point for renewal planning. The numbers look promising. Only one carrier is requesting an increase over 10% (Aetna, small group plans). In addition, many carriers are adding counties to their individual markets for 2021.
Small Group Plans
We’ll begin with the easier of the two program reviews, small group plans. These plans are for employers who had fewer than 50 employees on average during the calendar year prior to the effective (or renewal) date of the plan. All 12 insurance carriers providing plans in Washington State today have proposed plans and rates for the coming year, without much upsetting of the apple cart. Here’s a quick rundown:
The carriers’ 2021 requested rates are based on each carrier’s gain or loss during 2019, among other factors. Kaiser was the only carrier to be in a loss position in 2019, under their Kaiser NW and Kaiser WA programs (having a combined loss of almost -$12M); however, their Kaiser WA Options plans experienced a gain of approximately $5M. On an interesting side note, the total combined gain/loss of all small group plans from all carriers was about a $29M gain in 2019. This was roughly half of the 2018 combined gain of $61M.
All carriers are proposing individual plans with either single digit increases for the 2021 plan year, or rate decreases. The highest increase is being requested by Health Alliance NW (7.4%) and the carrier requesting the deepest reductions is Premera Blue Cross (-9%).
Coming into 2020, two carriers offering individual plans in Washington shrunk their marketing territory: Premera Blue Cross (dropped 7 counties) and Kaiser of WA (exited 1 county). For the 2021 proposed plan year, we are only seeing one carrier pull out of certain counties,Regence, leaving Columbus and Walla Walla, although they are also adding 17 counties to their docket.
A few years ago, carriers started to scale back in which counties their plans would be available. Last year carriers started to once again expand their territories, and this will continue into 2021.
Two new carriers have filed to market their plans to Washington residents: Community Health Network of WA and UnitedHealthcare of Oregon. Community Health expects to cover 11 counties, while United has proposed plans for 10 counties. Overall, for 2021, all counties in Washington will have at least 2 carrier options for individuasl to choose between (in 2020 there are currently six counties with only one carrier option).
Only one carrier experienced a loss in 2019 (Kaiser NW at -$2.2M). However, three carriers are continuing to try to make up for prior years’ losses between 2016 and 2019: Kaiser NW (who serves Clark and Cowlitz counties) has a cumulative loss of -$18.1M, Lifewise is at -$16.8M, and Regence BlueShield is at -$1.7M.
Senate Bill 5526 passed in 2019 allows the state to enter into cost-sharing agreements with health insurance companies – called Cascade Care. The State Exchange had to set standardized individual health plans for each of the bronze, silver, and gold metallic levels. These new plan offerings are slated to be available as of 1/1/2021. See Wakely’s review of the Standardized Plans that were designed by the state. This includes great comparison grids (starting on page 22) of each plan as compared to the current 2020 plan designs for each carrier.
A main component of Cascade Care plans is that the maximum reimbursement to providers and facilities (excluding pharmacy benefits) has been set at 160% of Medicare-Like Rates (MLR) in the aggregate (meaning carriers have leeway to pay some providers a lower percent and others a higher percent). Reimbursement for Primary Care Providers (family medicine, general internal medicine, and pediatrics) have a floor of 135% of MLR, and rural hospitals or sole community hospitals must not be paid less than 101% of allowable costs “as defined by the US Centers for Medicare and Medicaid services”.
There are five insurance carriers who have filed Cascade Care plans for 2021: Community Health, United Healthcare, Lifewise, Bridgespan, and Coordinated Care. The OIC will be providing additional information about these proposed plans later this month.
While these are preliminary renewal numbers for 2021, and the final listing of counties per carrier may change, this is a promising place to begin your renewal planning. It will remain to be seen how the new Cascade Care plans will influence the marketplace and how much less the expected premiums will be on these plans. We will also need to see how these plans will compensate agents, if at all. More to come!
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I love numbers. I'm a math geek. I read benefits industry articles and periodicals for relaxation (but, honestly, I'm still a fun gal). I also like to share what I've learned and you'll find it all here.