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October 20, 2014

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Health insurance rates likely to rise for Nevadans next year

Whether it's a plan on the Silver State Exchange or one offered by a small business, insurance companies want Nevadans to pay more for health care plans next year.

On average, insurance companies are proposing a 5 percent hike for health plans offered in the state, according to proposed rates submitted by insurance companies to the Nevada Division of Insurance.

The rate proposals show a mix of modest to high price increases and a few decreases for the 1,023 plans offered by 23 carriers in Nevada.

Included in those figures are plans created by the Affordable Care Act and offered on the Silver State Exchange in Nevada.

The proposed rate hikes arrive as Nevada and the rest of the country prepare for the next round of open enrollments in plans offered on federal and state-run exchanges.

Nevada’s exchange had a rocky launch last year thanks to glitches in its enrollment and billing software built by Xerox. Original estimates had 118,000 Nevadans enrolling for plans on the state-run insurance marketplace. But only 37,000 enrolled by June.

In May, the state fired Xerox. An internal audit highlighted 1,500 technical glitches in the software. Nevada will now switch to the federal healthcare.gov for the next enrollment period that begins in November, although its exchange will maintain its status as a state-controlled system. In the meantime, it will hire a new contractor to rebuild software to replace the work done by Xerox.

While rate increases mean consumers will have to pay more for insurance, the hikes aren’t a scarlet letter for the effectiveness of the Affordable Care Act.

Of the five carriers offering 92 health plans on the Silver State Exchange, all showed increases in rates this year.

“There is so much focus on how much it is going to cost,” said Jake Sunderland, spokesman for the state insurance division. “Those are valid concerns. But the price of care is high. We also need to make sure insurers charge enough to pay their medical bills.”

Part of the rate increases can be attributed to provisions in the Affordable Care Act. Insurance companies can no longer deny coverage to consumers with pre-existing conditions and mandated insurers provide more benefits, Sunderland said.

Nevada’s four carriers that sold insurance on the exchange last year all proposed rate increases of less than 10 percent for 2015, signaling that Nevada’s hikes will fall in line with other states. Anthem, a carrier with 13 percent of the exchange’s market share, decreased its rates by 4 percent.

A recent study of nine states found that insurers wanted to raise premiums by an average of 8 percent for individual health plans, according to consulting firm Avalere Health.

Below 10 percent is not bad, said Las Vegas insurance broker Lou Cila.

“But don’t forget the government is bearing most of the cost because virtually everybody on the exchange is getting a tax credit,” he said.

But brokers are still leery about the cost of the Affordable Care Act in Nevada.

The rates are going up because usage is going up, said Larry Harrison, a local insurance broker and member of the National Association of Health Underwriters.

“The people that were lucky enough to get through the inept system built by Xerox, the people that were adamant that they were going to get into the system, were the sick ones,” he said.

Exchange officials have not reviewed the recently released rate proposals but said the finalized rates will be released in October, said CJ Bawden, exchange spokesman.

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