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Health insurance premiums for individual plans on the federal marketplace will definitely go up for Pennsylvanians in 2017.

The Pennsylvania Department of Insurance released final individual and small group rates for Affordable Care Act market plans on Tuesday. The state approvals are the last stage in setting health insurance company’s rates for 2017 plans on the federal health insurance marketplace created under the president’s signature health care law.

Insurers will offer three products to residents of Rating Area 7, which includes York, Adams and Lancaster counties. In York, Capital Advantage Assurance Company will sell two subsidy-eligible plans, and Geisinger Health Plan will sell three. HHIC will sell small-group plans in York, but only off the federal marketplace.

On average, Pennsylvanians will see a 43 percent increase from 2016 plans offered by Capital Advantage Assurance, a 42 percent increase in plans offered by Geisinger Health Plan and a 55 percent increase in HHIC plans, according to final individual plan rates.

These rate increases only apply to the approximately 10 percent of Pennsylvanians who purchase their health care through the federal marketplace or small group policies. They do not apply to larger employers or government plans such as Medicare or Medicaid.

Increases: Across the board, 2017 offerings are more expensive than those available in 2016, and there are fewer of them. However, increases are greater for York residents.

Rates provided for silver market tier plans for both 21- and 40-year-old nonsmokers show an increase of more than 64 percent for Capital Advantage Assurance Co. plans. Geisinger Health plans in Rating Area 7 will go up about 38 percent, and HHIC plans will go up 46 percent.

Department of Insurance spokeswoman Ali Fogarty said rates can vary across the state because of  the variation in costs of medical services in different regions, but for the most part the plans were not priced correctly to begin with.

“When the federal marketplace began in 2014, insurers did not know much about the population that they would end up insuring,” she said in an email. “Claims from these plans have ended up being higher than anticipated, so insurers have found that they priced these plans incorrectly.”

In some cases, she said, insurers spent $1.16 in claims for every $1 they collected in premiums.

In most instances, state regulators approved greater increases than what was originally requested by insurers. Compared to Capital Advantage Assurance Co., Geisinger Health and HHIC requests made in the spring, the state insurance department approved individual plan rates that are 27 percent, 6 percent and 5 percent higher, respectively.

Fogarty said that was done to ensure “market stability" as insurers increasingly withdrew from the federal marketplace throughout 2016.

“After United Healthcare and Aetna withdrew from the marketplace, other insurers expressed concerns about Pennsylvania’s individual market, their ongoing losses and the federal actions that impact market stability,” she said. “The department had to work with these insurers to ensure that they continued to view Pennsylvania as a viable market.”

Subsidies: Officials said many people buying individual plans on the federal marketplace are eligible for tax subsidies, which will offset some or all of the increases.  Last year, three out of four commonwealth residents who bought plans through the federal exchange were eligible for subsidies to help pay premiums.

Insurance Commissioner Teresa Miller announced the department will join Pittsburgh-based health insurer Highmark Inc. in its lawsuit against the federal government over 2014 losses from the Affordable Care Act they say totaled about $223 million.

The health insurer said the government failed to follow its risk corridor provision, which was included in the law to create a stable environment for insurers that incurred higher-than-anticipated claims. The provision included a promise to pay some of the losses insurers sustained during the first years of the new law.

“Congress passed the law with this protection, and their decision to renege on their commitment to insurance companies has created more instability that contributes to rising costs for consumers,” Fogarty said.

Lowest Cost Subsidy Eligible Marketplace Plans Offered in York (Before Subsidies and Based on a 21-year old nonsmoker)

Metal LevelIssuer Premium 
GoldCapital Advantage Assurance Company $513.22
SilverCapital Advantage Assurance Company $436.73
GoldGeisinger Health Plan $515.38
SilverGeisinger Health Plan $410.67
CatastrophicGeisinger Health Plan $294.70
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