Many insurers seek double-digit rate hikes for 2016: 6 things to know

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Health insurers with proposed rate hikes above 10 percent for plans sold on the Patient Protection and Affordable Care Act's insurance exchanges were made available online on Monday.

State regulators and insurance companies will now begin a back-and-forth process of negotiation before the rates are locked in this November. "These specific rates will be subject to vigorous rate review and revision," Andy Slavitt, the acting administrator of CMS, told The Hill.

Here are six things to know about the proposed rate hikes.

1. Mr. Slavitt told The Hill most of the proposed rate increases for 2015 are in the 15 to 20 percent range.

2. There are disparities in the rate hikes across geographical regions. For instance, BlueCross BlueShield of Tennessee — the state's biggest insurer — has proposed an increase of 36 percent for some plans, while one of New Mexico's biggest carriers, Blue Cross Blue Shield, is seeking a 50 percent increase, according to The Hill.

3. Health insurance companies proposing the most significant rate increases are likely dealing with older and less-healthy customers, according to The Hill.

4. The increases are attributable to insurers having access to more data, according to Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "Insurers seem to be reporting higher trend, which means they are seeing bigger increases in healthcare costs," Mr. Levitt told Politico. "But really what's going on here is they now have data showing what the risk pool looks like." In 2014, it was a guessing game, as health insurers were not sure who was going to enroll in the insurance plans offered on the marketplaces.

5. After reviewing a full year of data, some insurers are realizing the risk pool, or the balance between sick and healthy customers, is more uneven than previously expected, according to The Hill.

6. Seth Chandler, an expert in insurance law at the University of Houston believes there is a different explanation for the rate hikes. "Insurers played this strategy of getting customers in the door by experimenting with lower premiums than really were appropriate, and then hoped that those customers would stick," Mr. Chandler told Politico. "If they did stick, they could raise the rates."

More articles on payer issues:

Competing health insurers show interest in taking over Humana: 3 key points
Insurers gearing up to challenge CMS' Medicaid managed care overhaul
Aetna, Cigna, Anthem and Humana's latest financial results

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