Local Health Plans Help Contain Cost-Growth

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A recent brief published by the American Academy of Actuaries provides an analysis of the main drivers behind rising premiums as health plans prepare their rate filings for 2020. Some parts of the country could see premium increases as high as 8 percent, which mirrors the premium increases experienced in the 2019 rate filings. However, premiums in Washington state are only expected to rise less than 1 percent. Mike Kriedler, the state’s insurance commissioner, attributes this slow growth to insurers that only operate regionally, such as Asuris Northwest Health and Premera Blue Cross. Nearly 250,000 consumers purchase health coverage through Washington’s individual market.

Emily Curran from Georgetown’s Center for Health Insurance Reforms claims that local and regional health insurers help fill in geographical gaps in coverage and build better relationships with community providers and hospitals. Furthermore, these insurers have a greater interest in ensuring that the local market is stable because it is their main line of business. While larger insurers can afford to have their enrollment numbers fluctuate, smaller health plans must work hard to retain their customers.

However, there are some downsides to these types of plans. These plans will have fewer staff, which can result in slower customer service. They can also prevent enrollees from seeing providers when they travel to other parts of the country because the plan hasn’t contracted with them.

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