5 States Facing Huge Obamacare Rate Hikes

Significantly higher insurance rates could be coming to an Obamacare exchange near you. And maybe nearer than you think.

Jul 13, 2014 at 1:00PM

Obamacare rate change numbers for 2015 are flying around like confetti at Times Square on New Year's Eve. Reports emerged of some insurers hiking premiums by 35% or more. Other news, though, noted insurers dropping rates by as much as 23%.

The truth is that it's still unknown exactly how much rates will change in the second year of operation for the health exchanges established by the Affordable Care Act. Not every state has reported insurers' filings, while some have only reported partial information. 

So far, the overall average rate increase for states reporting information is 7.22%. Some states, however, will fare much worse. Here are the five states being slapped with the biggest Obamacare rate hikes thus far, according to a report from PWC identifying insurers' requested rate increases.

5. Arizona
If insurers get their way, the average 2015 premium for Arizona residents will be around $331 per month. That's an increase of 11.2% compared to this year. Two health insurers, in particular, appear to be causing many in the Grand Canyon State to pay higher rates than most Americans.

Cigna asked for 2015 premiums over 14% higher on average than current levels. That jump pales in comparison to what Humana (NYSE:HUM) is requesting, though. Humana filed for an average rate increase of over 25%.

4. Virgina
Virginians could pay 11.3% more for individual health insurance next year. The average 2015 premium for the state will be $351 per month if insurers' requested rates go through. 

One national player operating in the state, WellPoint (NYSE:ANTM), asked to bump rates for its Anthem HealthKeepers plan up by an average of 8.5%. As in Arizona, Humana wants a heftier increase -- with an average jump of more than 22%.

3. Iowa
Residents of the Hawkeye State rank third in Obamacare rate increases so far. Premiums could rise by 11.5% on average.

Only two insurers offer plans on the Obamacare health exchange for Iowa: CoOportunity Health and Coventry Health Care. CoOportunity requested an average rate increase of just over 14%. Coventry, which was bought by Aetna (NYSE:AET) in 2013, asked for an average 8.7% premium boost. 

2. Vermont
Like Iowa, Vermont has only two insurers participating in its state health exchange. Both are also asking for rate increases --- but even higher than Iowa's hikes. They are requesting insurance rate hikes of 12.6% on average next year.

Blue Cross Blue Shield of Vermont, the state's largest health insurer, requested an average premium jump of 9.8%. Meanwhile, MVP Healthcare, a regional health insurance company founded by physicians, filed for an average 15.4% increase. 

1. Indiana
Indiana claims the dubious distinction as the state getting hit by the greatest percent increase in requested rates so far. Hoosier State residents could face premiums more than 15% higher in 2015 than this year.

Physicians Health Plan of Northern Indiana asked for an average rate increase of a whopping 46%, according to the Indiana Business Journal. By comparison, the 9.7% average increase requested by WellPoint's Anthem Blue Cross and Blue Shield seemed nearly small. However, state residents paying $5,935 per person on average in 2015 for an Anthem plan might not see the increase as so minor.

Asking for more, delivering more
While some citizens of these five states probably won't be happy campers as a result of these insurers asking for more money, shareholders of several of the companies are already smiling. 2014 has been a good year for many health insurers.

Three of the publicly traded insurers mentioned have enjoyed stock gains of 20% or more year-to-date. Aetna's stock is up 20%. WellPoint shares have climbed 22% thus far in 2014. Humana, which requested big increases in at least two of the listed states, has seen its stock surge by 24%.

Cigna experienced the most disappointment, only rising by 7%. The insurer's lesser gains can't be blamed on Obamacare, though. Individual insurance just doesn't make up a significant component of Cigna's total revenue.

Humana actually expects to lose money from its Obamacare plans this year. However, the reinsurance and risk corridor provisions of the Affordable Care Act help cushion those losses. Humana stated earlier this year that it expects to receive at least $250 million and perhaps as much as $450 million from the federal government.

As more states report their 2015 rates, the states with the biggest rate increases could change. However, don't expect the health insurers' positive outlooks for 2014 to change all that much.


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Keith Speights has no position in any stocks mentioned. The Motley Fool recommends WellPoint. The Motley Fool owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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