By John Reichard, CQ HealthBeat Editor
June 10, 2013 -- District of Columbia officials say premiums that insurers will charge this fall on the new insurance exchange won't show a spike in rates and that customers will have a wider choice of plans than they do now.
"We're going to be the best exchange in the country," Mila Kofman, executive director of the D.C. Health Benefit Exchange, predicted in an interview.
The proposed rates for small businesses and people who are enrolling in individual coverage starting Oct. 1 "are largely in line with current premiums for policies in the market today," the D.C. Department of Insurance, Securities and Banking said in a news release. The announcement referred specifically to proposed rates by Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and United HealthCare, the four companies selling coverage to small businesses. All four—except United—also will sell individual coverage.
Officials wouldn't be specific about how rates in 2014 would compare to 2013. D.C. exchange customers "will have a robust selection of insurance policies and a wide range of prices," said Kofman. Insurers "want to grow their business and so they're pricing in a pretty competitive way," she said. The proposed rates could come down following review of the D.C. insurance department.
As examples of some of the proposed rates, officials said that a 27-year-old next year can buy a bronze plan for as little as $124 a month and a platinum plan for as little as $249 a month. Under the health law (PL 111-148, PL 111-152), the bronze plans require policy holders to pay relatively large out-of-pocket costs, other than premiums, for covered benefits while platinum plans require them to pay relatively little out of pocket but higher premiums for those same benefits.
In other examples of proposed rates, a 40-year-old could pay as little as $166 for a bronze plan and $333 a month for a platinum plan. For a 55-year-old, a bronze plan could cost as little as $296 a month.
"Small businesses in the District could buy a bronze plan for a 27-year-old employee for as little as $144 a month and a platinum plan for a 55-year-old for as little as $572 a month," the news release said.
States and jurisdictions that support exchanges and the health care overhaul law (PL 111-148, PL 111-152) tend to highlight good deals while those unfavorable to the law point to large increases. In Ohio, for example, the state's Republican lieutenant governor, Mary Taylor, said proposed rates for individual coverage next year would add up to an 88 percent increase on average over this year. But benefits in general in the individual market this year are much skimpier than they will be next year.
Kofman said the D.C. exchange has come a long way since the start of the year, when she was the only employee on staff. She said the exchange was the first to pass "wave 2" testing, which refers to a phase of testing to exchange data with the federal data hub. The testing showed the ability of the D.C. exchange to connect securely to the hub and to exchange data back and forth. While that's an important milestone, she said, there are many other data linkages the D.C. exchange must be able to perform to determine, for example, whether a customer is a District resident. Information technology is still a work in progress, she indicated. "No state could tell you that it is nailed down," she said.
One distinctive feature of the D.C. exchange is that starting in October, the employees of small businesses will be able to choose among four insurers, if their employer decides to give them that choice. Now, small employers in the District—defined as those with 50 or fewer workers—by law only can offer employees one plan. For 2014, small employers could decide to stick to offering one insurer, or provide a choice.
That puts D.C. a full year ahead of the federal exchange, which in 2015 will only offer that employee choice model to the states it serves. "When I say we're going to be the best exchange in the country I mean it," Kofman says.
Another unusual feature is that D.C. starting in 2015 will require that employers with 50 or fewer workers only buy coverage on the exchange. Unlike in other areas, except Vermont, there won't be a market outside the exchange where small employers can shop for coverage. That makes it easier for small businesses in D.C. to compare what insurers are charging, D.C. officials say.