Name:   GoneFishin - Subject:   Some Other Facts Date:   7/7/2015 12:07:57 AM

Alabama is one of just five states that doesn’t conduct a state-based review of proposed rate changes.  In Alabama, HHS is responsible for reviewing proposed rates. Obamacare requires that for individual coverage at least 80% of the premium must be used for claims. If is is less, the difference is rebated back to the Insured. There is NO gouging as Hound implies.

Blue Cross of Alabama has requested increases that range from 11% for the low plan to 70% for the highest coverage Platinum Plan. The pricing model was way off for the plans with the lowest deductibles such as the Platinum Plan. I suspect if the increase is approved for the Platinum Plan, many will drop down to a lesser plan and pay more out of pocket.

This is similar to the introduction of dental coverage and long term care. Everyone with pre existing dental problems used it when it was first offered. Companies lost a lot of money in the early years. The same was true with Long Term Care. When new coverage is first offered, assumptions are made in order to price coverage and then the marketing departments try to get the rates lowered so they can get market share. The larger the market share the better the companies can negotiate lower rates with doctors and hospitals. After a year or 2, you will see the rate increases level off and, will for the most part, be a reflection of projected medical costs for the next year rather than expected utilization due to pre existing conditions.