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Status: This proposed rate increase is currently under review.
The ABC Health Insurance Company
Green Earth products sold in Indiana
- The Affordable Care Act requires health insurance companies to provide information to consumers when they propose average rate increases of 10% or more.
- The ABC Health Insurance company has requested a rate increase above this threshold.
- The law requires a review of these proposed rate increases by States, or if a State does not review insurance rates, by the federal government, to determine if the proposed increase is unreasonable.
- The Indiana Department of Insurance will review this proposed rate increase.
- This posting does not mean that the proposed rate increase is too high or unreasonable. That can be determined only after the rates have been reviewed. When the review is completed, you can see the result by checking this website.
ABC Health Insurance Company Is Asking to Increase The Health Insurance Rates It Charges to Policyholders
How large is the proposed rate increase?
- If this proposed rate increase goes into effect, the average new rate for The ABC Health Insurance Company’s Green Earth products [link] sold in Indiana will be $235.05 a month. This is up $24.82 from last year’s average rate of $210.23 a month.
- Expressed as a percentage, this proposed increase is an 11.8% increase on average.
How will this rate increase affect the premiums people pay?
- A “rate” is a base price for health benefits – a “premium” is the specific amount charged to a policyholder. The actual premium a policyholder pays may be higher or lower than the $235.05, based on factors like their age and where they live.
- The 11.8% is an average increase for all policyholders. The insurance company has stated that the minimum premium increase any of its customers will receive will be 5% and the maximum is 13.6%. The new premiums people pay will be in that range.
When will this take effect?
- If this increase goes into effect, it will begin on September 2, 2012, and would affect 900 people.
How will I know if this increase has taken effect?
- If this increase goes into effect, ABC Health Insurance Company will notify its policyholders of their personal premium increase.
What Is Causing the Proposed 11.8% Rate Increase?
The insurance company is asking to increase rates because it believes there will be increased costs for the three factors that make up an insurance rate: medical services costs, administrative expenses, and profits.
What Is Included in Medical Services Costs?
The cost of medical services are usually the main portion of a rate. These are the payments the insurance company makes to hospitals, doctors and other providers when the policyholders need medical care. The insurance company believes that 80%of the 11.8% total proposed rate increase will be the result of higher medical service costs next year. This table shows how much medical services costs are expected to increase.
Rates and Medical Costs
*This category includes several factors that may apply to the insurance company’s rates:
- Capitation payments, which are fixed, per person payments to healthcare providers that cover many services;
- Changes in how much the company charges in cost sharing , which is the policyholder’s share of the costs of covered medical services, for example, a co-pay;
- Changes in the benefits that are covered; and
- Correction of prior net claims estimate.
How Are Rate Dollars Spent by This Insurance Company?
If this proposed rate increase is allowed, the average new rate for this health insurance plan will be $235.05 a month. This is up $24.82 from last year’s rate of $210.23 a month.
This chart shows the costs that will make up this average rate. A policyholder’s premium may be higher or lower than this rate.
Recent Rate History?
You may want to see how the requested rate increase compares to rate increases that ABC Health Insurance Company has requested in the past for the policies covered by the disclosure.
*These increases were approved before this review process was in place.
Which Products and Plans Are Affected by This Rate Increase?
The proposed rate increase that ABC Health Insurance Company is asking for will affect the list of products and plans that appears in the chart below.
Other Information
If you have questions about this proposed rate increase, or any other questions about this plan, you should contact your state insurance regulator. The information below is commonly used by insurers to report rate increases to state insurance regulators. This information may be helpful if you want to ask your Department of Insurance about this plan.
This article was written by the department of health and human services
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