Ohio “Obamacare” Rates to Go Up, Amount Varies

Ohio insurance regulators have finished rate approval for 2015 “Obamacare” health policies, and your rates are going to go up by … well, it depends, according to analysis by the Cleveland Plain Dealer.

Your rates might go up by only a few percentage points. They might even go down. Or they might go up a lot more.

The average you might have seen reported late last week, 12 percent, is simply a mathematical average released by the Ohio Department of Insurance after approving insurers’ rate requests for the 2015 Affordable Care Act marketplace plans.

It is a straight average, comparing the average of premiums for all companies that say they will offer policies through the ACA marketplace next year — the big insurers, the small insurers, the ones offering expensive, platinum-plated policies and the ones specializing in lower-cost coverage — with the average premiums in place now.

This 12 percent figure brought swift criticism from politicians who dislike the Affordable Care Act, or ACA. Republican U.S. Sen. Rob Portman of Ohio and U.S. House Speaker John Boehner, Republican of West Chester, said the “double-digit” hike provides evidence that the ACA is costing Americans money that they could otherwise use for retirement, groceries or education.

But the average is not particularly illuminating, and is arguably misleading — even before accounting for subsidies many buyers will get to reduce their actual costs. It can lead easily to false assumptions. The reasons for this are illustrated in the insurers’ filings with the state Department of Insurance. The Plain Dealer reviewed a number of them late last week.

The best and most glaring example of what’s wrong with the 12 percent figure involves Time Insurance, sold under the brand name Assurant Health. Assurant will be new to Ohio’s ACA market in 2015. It could be a fairly small player in its inaugural year.

Its average premium — $516.46, according to the state – happens to be significantly higher than other insurers’, for reasons that will be explained shortly.  Meantime, if you took just this one company out of the equation and did the math, the state’s simple computation – still not a good one — would lead to an average rate hike in 2015 of 9 percent, not 12 percent.

Nine percent is still decent hit. But that leads to the second problem. The state based its rate-hike claim by considering all insurers equal to one another. They are not equal.

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